Lagarde to leave ECB early to speak freely beyond monetary policy

· Economy · European Union

European Central Bank President Christine Lagarde said she will step down on February 7, roughly nine months before her eight-year term ends, so she can speak more freely on matters beyond monetary policy and confront the "misrepresentation of the truth". European Council President Antonio Costa said the process to find a successor is underway. The departure comes as the ECB battles inflation risks from an Iran-driven oil shock and a sharp rise in bond yields threatens growth; earlier on Thursday the bank kept its key rate on hold at 2.5%, a decision markets read as hawkish. Lagarde's exit also fuels speculation about her future, including a possible role at the World Economic Forum, ahead of a presidential election in her native France.

Why it matters：An early change at the top of the eurozone's central bank introduces uncertainty over the direction of interest rates just as an energy shock and rising bond yields test the currency bloc.

Key points

  • Lagarde will leave on February 7, ahead of her term's end.
  • The ECB held its key rate at 2.5%, with markets pricing a 67% chance of a December hike.
  • European Council President Antonio Costa said the successor search is underway.

Sources (original reporting)

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