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Investors have been scrutinising the ECB's weekly purchase data
for evidence of the central bank's effort to stem a rise in
borrowing costs on bond markets, largely driven by higher
inflation expectations in the United States.
The ECB agreed last week to "significantly" increase its bond
purchases to hold yields down, but Lagarde said it will be a
while before this move shows up in the weekly bond-buying
figures.
"While records of our weekly purchases will continue to be
distorted by short-term noisy factors – such as occasionally
lumpy redemptions – the step-up in the run-rate of our programme
will become visible when ascertained over longer time
intervals," Lagarde said in a speech.
Market concerns were likely to become even more pressing after
the U.S. Federal Reserve increased its growth and inflation
expectations on Wednesday while guiding for no interest rate
hikes until 2024.
That pushed up yields on long-term U.S. Treasuries, which
dragged up euro zone borrowing costs in their wake.
Lagarde simply repeated the bank's policy message, including its
guidance on growth and bond yields.
"If sizeable and persistent, increases in those market interest
rates, when left unchecked, may become inconsistent with
countering the downward impact of the pandemic on the projected
path of inflation," Lagarde told the European Parliament's
committee on economic and monetary affairs.
(Reporting by Balazs Koranyi; editing by Francesco Canepa, Larry
King)
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