Yahoo News is better in the appYahoo News is better in the appYahoo News is better in the app -- As night fell in Marrakech earlier this month, Christine Lagarde was there, busy talking to a colleague from back in Frankfurt.Everything Apple Plans to Launch at Oct. 30 ‘Scary Fast’ Mac EventS&P 500 Extends Slide From Its July Peak to 10%: Markets Wrap
With inflation too high, output shrinking or barely growing, a fiscal squeeze looming, key elections due, and wars raging nearby, the confluence of political and economic cycles puts the president at the fore of scrutiny on the central bank. Keeping her peers focused is likely to fully occupy Lagarde. While she has achieved more public discipline than her predecessor Mario Draghi — whose style of doing things his own way alienated those with different views — it’s hard going.
Those discussions let her take the mood, ensuring the decision proposals she and her chief economist, Philip Lane, prepare in close cooperation are reflecting what can realistically be agreed. Politics outside the room won’t help the president, who as the chief protagonist of policy will bear the most responsibility.
Inside the gathering, and in the presence of Lagarde, he and his German counterpart, Christian Lindner, warned that cost-of-living worries could propel extremist parties. Lagarde was in another job, but that backstory gives her an understanding of the challenges faced by politicians, even if she is a different president from the technocrat class that led the ECB until now.
“You can be an excellent economist and destroy an economy,” said Stournaras, another former finance minister. “Judgment is the No. 1 quality.” Where the ECB has endured criticism is in its delay in raising rates, held back by Lane’s insistence that inflation pressures would be transitory, and by promises to keep policy loose.
It’s said to be a frustration to Lagarde, who believes perception matters almost as much as actions, that the market sometimes doesn’t understand her — or doesn’t want to. In Marrakech, when asked publicly how she copes with tough times, Lagarde replied that she holds her breath. Normal people last maybe 90 seconds but using a method called apnea, she can endure 3 1/2 minutes.
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