ECB's Lagarde says interest rates to stay high as long as needed to defeat inflation

Lagarde’s remarks, at an annual conference of central bankers in Jackson Hole, Wyoming, came against the backdrop of the ECB's efforts to manage a stagnating economy with still-high inflation. The central bank has raised its benchmark rate from minus 0.5% to 3.75% in one year — the fastest such pace since the euro was launched in 1999.

Most of Lagarde's speech focused on disruptions to the global and European economies that might require higher rates for longer than was expected before the pandemic. Those challenges include the need to boost investment in renewable energy and address climate change, the rise in international trade barriers since the pandemic and the problems created by Russia's invasion of Ukraine.

Her address followed a speech earlier Friday in Jackson Hole by Federal Reserve Chair Jerome Powell, who said the Fed was prepared to further raise rates if growth in the United States remained too strong to cool inflation.

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