We are live at the Sintra Forum where ECB President Christine Lagarde has backed the central bank’s decision to hike rates in June as necessary to rein in inflation. However, Lagarde insists ‘unconventional instruments’ are no longer needed since the last inflation shock. The U.S. Supreme Court has ruled that President Trump does not currently have the power to remove Federal Reserve governor Lisa Cook over allegations of mortgage fraud but could be granted them in the future. The U.S. and Iran present mixed messages ahead of peace talks in Doha. President Trump has reiterated his claim that the war has been won.<br>See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

ECB's Lagarde backs June rate decision

Squawk Box Europe Express

# Full Transcript

**Podcast:** Squawk Box Europe Express

## Participants

- **Karen Cho** (CNBC International)
- **Steve Sedgwick** (CNBC)
- **Annette Weissbach** (None)
- **Stefan Bougenert** (Euronext)

## Transcript

The CNBC app, global market news in one place. Customizable sections and personalized alerts, stocks tracking, interactive charts and market insights all in your hands. Stay connected, stay informed. Download the CNBC app today. Welcome to Squawk Box Europe. I'm Karen Cho with Steve Sedgwick in London and Annette Weissbach in Sintra. These are your headlines.

ECB President Christine Lagarde opens the Sintra forum defending June's rate hike as necessary to fend off inflation pressures, but she insists the ECB won't need the same force as during the last inflation shock. We no longer need to reach for unconventional instruments. While we have them at hand, we can now focus on stabilizing inflation with policy rates as our primary tool.

Monetary policy has gone back to basics. We'll have special coverage from Sintra throughout the morning. The US Supreme Court rules that President Trump does not currently have the power to fire Federal Reserve Governor Lisa Cook, but could do in the future. Doha diplomacy in question as the US Iran issue mixed messaging yet again around the prospect of fresh talks in the Qatari capital.

President Trump doubling down on assertions the war has been won. We're winning militarily. It's almost won militarily, I would say. And it's really very simple. It's the denuclearization of Iran.

Back to basics. That's the message that ECB President Christine Lagarde had for investors as the central bank's annual conference kicked off in Sintra, Portugal. Speaking Monday evening, Lagarde looked to differentiate between now and the ECB's policy aggression in 2022.

We no longer need to reach for unconventional instrument. While we have them at hand, we can now focus on stabilizing inflation with policy rates as our primary tool. We no longer need to act with the same force. We can make measured adjustments to rates calibrated to the shocks we face. And we no longer need

complex forms of forward guidance. Our decisions are data dependent and taken meeting by meeting. So monetary policy has gone back to basics. Let's get to Aneta for more. Aneta, the retreat and the oil price, just giving a little bit more breathing room to the governing council. But for me, the question is, who's the most hawkish in the room now? Because we were talking the other day to Bank of America that are suggesting perhaps three

rate hikes from the US Fed Reserve this year versus, of course, now what we're seeing from the ECB in terms of that language. Yes, exactly. I mean, I think when we talk about the ECB, the most hawkish person in the room will probably be Isabel Schnabel, who already stepped out recently saying more rates hike and more rate hikes are needed given the inflation picture. But also what Philip Lane was saying recently ...

ECB's Lagarde backs June rate decision

Transcript

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ECB's Lagarde backs June rate decision

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.