She leaves on February 7, about nine months before her term ends, as the bank held rates steady. European leaders begin choosing her successor now.
By Finance Unc ·
Christine Lagarde will step down as president of the European Central Bank on February 7, 2027, nearly nine months before her eight-year term was due to end on October 31, 2027, the bank said on Thursday, October 29. Lagarde informed the bank's Governing Council and European Council President António Costa, who said the process to choose her successor would begin immediately. The ECB gave no reason for her departure. 'It has been a great pride and a huge privilege to serve this institution,' Lagarde wrote on X.
Lagarde, 70, has led the ECB since November 2019 and previously headed the International Monetary Fund and served as France's finance minister. The timing lets European Union leaders choose her successor before France's presidential election next spring, Reuters and AFP reported. Former Dutch and Spanish central bank governors Klaas Knot and Pablo Hernández de Cos are seen as leading contenders, according to Reuters; no candidate has officially been named. Later the same day, the ECB kept its key interest rates unchanged, after raising them in June and September.
The yield on France's 10-year government bond rose above 5 percent on Wednesday, October 21, for the first time since 2002, Euronews reported, a sign of investors' concern about French government finances and higher interest rates in Europe. Higher government borrowing costs can feed through to mortgages and business loans.
The quarter-point increase lifts the ECB's deposit rate to 2.50 percent, its second hike this year after June.
By Finance Unc ·
The European Central Bank raised all three of its key interest rates by a quarter percentage point on Thursday, September 10, lifting its deposit rate to 2.50 percent and its main refinancing rate to 2.65 percent, according to the bank's announced rates as compiled by market data services. It was the ECB's second increase of 2026; in June it raised rates for the first time since September 2023, as the energy shock from the war in the Middle East pushed up prices across the euro area.
The bank had held rates in July, when President Christine Lagarde said policymakers had considered a hike but agreed unanimously to wait. Higher rates in Europe can strengthen the euro against the dollar, which affects the cost of European goods and travel for Americans.
The Finance Ministry's figures for July 30 to August 26 are the largest monthly intervention on record, about $96 billion.
By Finance Unc ·
Japan's Finance Ministry said it spent a record ¥15.4 trillion, about $96 billion, buying yen in the currency markets between July 30 and August 26, the largest monthly intervention on record, according to the ministry's figures reported at the end of August. Governments intervene this way, selling foreign currency reserves to buy their own currency, to slow a sharp fall in its value, which raises the cost of imports such as fuel and food.
For Americans, a weak yen makes travel to Japan and Japanese goods cheaper, while a sudden reversal can ripple through global markets.
The fund cited the war in the Middle East, higher energy prices and stalled progress on inflation, but expects a rebound to 3.4 percent in 2027.
By Finance Unc ·
The International Monetary Fund lowered its forecast for global economic growth this year to 3.0 percent from 3.1 percent in its July 8 World Economic Outlook update, citing the war in the Middle East, higher energy prices and geopolitical uncertainty, Reuters reports. It raised its 2027 forecast to 3.4 percent from 3.2 percent and its 2026 global inflation forecast to 4.7 percent.
The IMF said the world economy had so far weathered the shock from the war better than feared, but its forecast assumes the Strait of Hormuz begins reopening in mid-July; the update was prepared before the renewed U.S.-Iran fighting. It cut its forecast for the Middle East and Central Asia to 0.7 percent growth this year, and for the euro area to 0.9 percent.