Carsten Brzeski, the Chief Economist ING Germany, notes that the style and communication of new ECB President Christine Lagarde were the subject of much speculation in the run-up to today’s meeting. 

"Lagarde took this bull by the horns immediately and started the Q&A session with a long speech about how she had her own style and warned against making comparisons with Mario Draghi and over-interpreting her words. She also said that she might not know everything and would admit if this was the case.

After these personal words, the traditional Q&A session started. In all honesty, it is, in our view, still hard to identify what Lagarde actually stands for. Just some highlights:

• Lagarde wants to be as consensual as possible. “I am neither a dove nor a hawk, I see myself as an owl. An owl with wisdom”.
• On inflation. An inflation rate of 1.7% at the end of 2022 was pointing in the right direction but it's not enough to be satisfied. At the same time, Lagarde said that the eurozone economy was getting close to potential in the medium term, which eventually could argue against a very accommodative monetary stance.
• Adverse effects. The ECB was “very aware” of side effects of negative rates.
• On country-specific developments. “I will not comment on countries” when asked about France but Lagarde gave answers to a question on Greece.
• On unconventional measures and adverse effects, Lagarde remarked that she “won’t revisit past policy decisions”, while at the same time she said that the “effectiveness and appropriateness” of past measures will be examined in the strategic review.

All in all this was a very entertaining press conference with a self-proclaimed monetary policy owl. As regards the short-term outlook for monetary policy, further easing seems to be off the table, at least with the current macro projections, and wait-and-see looks the way forward. For ECB watchers and financial market participants, however, learning how to read Christine Lagarde will take some time. Today, at least we had the impression that it was not always clear whether Lagarde spoke on behalf of herself or on behalf of – at least the majority of – the ECB’s Governing Council."