Summary of European Central Bank resolution and Lagarde press conference

Resolution result: The European Central Bank has decided to keep interest rates unchanged, with officials stating that more time is needed to assess the impact of the Iran conflict on the economy. During this meeting, the European Central Bank discussed various options, including raising interest rates. Regarding future interest rate policy: The management committee is ready to adjust all tools at any time, emphasizing that no specific interest rate path has been pre-committed. Decisions will be made based on data and at subsequent meetings. Regarding inflation and the economy: The risks of upward inflation and downward economic growth are intensifying. The economy is clearly deviating from the baseline. Most long-term inflation expectations indicators are around 2%. In the short term, inflation rates will be much higher than 2%. Regarding the Iran conflict: The Iran conflict is putting pressure on economic activities. Looking ahead, high energy costs are expected to continue to put pressure on real incomes, making households and businesses less willing to consume and invest. Regarding second-round effects: Lagarde stated that the European Central Bank has not yet seen second-round effects. There have been direct impacts as well as some indirect impacts, but there have definitely been no second-round effects. It is clear to herself the policy direction of the European Central Bank in terms of interest rates.