Lagarde Quits ECB 9 Months Early as Bank Holds 2.5% Rate Amid French Bond Turmoil
Updated
Updated · Reuters · Oct 29
Lagarde Quits ECB 9 Months Early as Bank Holds 2.5% Rate Amid French Bond Turmoil
3 articles · Updated · Reuters · Oct 29
Summary
February 7 is Lagarde’s exit date, ending months of speculation and giving EU leaders time to choose a successor before France’s presidential election.
Political ambitions drove the resignation, a source said, as Lagarde wanted freedom to speak on French and global issues that ECB neutrality constrained.
Markets barely reacted because investors expect the ECB to keep operating much the same under a new chief, with Klaas Knot and Pablo Hernandez de Cos seen as leading contenders.
Thursday’s policy meeting now lands against an awkward backdrop: the ECB is expected to hold its deposit rate at 2.5% even as Iran-driven energy costs keep another hike—possibly in December—on the table.
French bond stress is the nearer threat, with borrowing costs at multi-decade highs and the ECB weighing tools from flexible reinvestments to its unused Transmission Protection Instrument if market pressure worsens.