Christine Lagarde wants you to know that everything is under control. The ECB president declared on June 11 that medium-term inflation expectations in the euro area remain “firmly anchored” around the central bank’s 2% target, even as she simultaneously announced a 25 basis point interest rate hike to deal with the fact that, well, inflation is still running hot.
What Lagarde actually said, and what the numbers show
At the June 11 press conference following the rate decision, Lagarde pointed to both survey-based and market-based measures of inflation expectations as evidence that the 2% target remains credible. No signs of de-anchoring. No second-round effects where higher prices feed into wages, which feed back into even higher prices.
She doubled down on June 22 in the European Parliament. “We see no evidence yet of de-anchoring of inflation expectations,” she told lawmakers.
The ECB’s own projections tell a more nuanced story. Headline inflation is expected to come in at 3.0% for 2026, still a full percentage point above target. The forecast drops to 2.3% in 2027 and finally hits the magic 2.0% number in 2028. In English: the ECB is telling markets that inflation won’t be at target for another two years.
