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00:00Yesterday it was very very telling in the blog that you keep on talking about you know monetary policy normalization has to be gradual. So does that mean that you'll you'll tiptoe kind of towards. I don't think you're you know moving out of negative interest rate is actually tiptoeing. It's more than that. But let me just say word of that. I believe that gradualism is actually the way to go. As long as inflation expectations are well anchored. If we were in a situation where we anticipate d anchoring or if if we had a surge in demand that's a different story then it doesn't need to be as gradual as it as it could be otherwise. But I don't think that we are in this situation of surging demands demand at the moment. It's definitely an inflation that is fueled by the supply side of the economy. So in that situation we have to move in the right direction obviously but we don't have to rush and we don't have to panic. The market is taking the gradual word as actually no 50 basis point hikes. Is that the wrong way to look. I don't think they should translate a word into a percentage point. No. So nothing's off the table. I'm sorry. Nothing's off the table. First of all the rate table is the table of the Governing Council. Second what I'm setting now is direction of travel destination. You know this. It's the moving out of negative territory. It's aiming towards the neutral rate further on. And it's really working on the basis of data. So when we need to be very attentive to the development of the of the economy how likely is it that the eurozone goes into recession. We don't have that as a baseline. You must have heard that sentence that time which is what it will also do scenarios. And we have the negative the adverse the you know various alternatives there on the basis of hypotheticals such as boycott of oil interruption of gas supply that clearly would have a significant impact on the economy. But for the moment we are not seeing a recession in the euro area.

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Recession Is Not ECB Baseline in Euro Area: Lagarde

European Central Bank President Christine Lagarde discusses inflation in the Euro Area economy and the potential for a recession with Francine Lacqua at the World Economic Forum’s annual meeting on “Bloomberg Markets Europe.” (Source: Bloomberg)

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