ECB President Christine Lagarde sees inflation moderating next year - FAZ

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• European Central Bank President Christine Lagarde expects inflation to start moderating next year, but the ECB will be ready to act if it doesn't.
• "We expect inflation rates to start falling as early as January," she told German newspaper the Frankfurter Allgemeine Sonntagszeitung.
• "This is currently noticeable and worries many people — be we do not expect this rise in inflation to last," she said.
• If inflation does appear to be more entrenched, the ECB would act. Raising interest rates "must serve to fulfill our mandate of price stability," she said in the interview.
• Still, talk of higher interest rates now isn't appropriate, she contends. Tightening monetary policy now would take about 18 months before the economy feels its effect. The central bank's forecasts indicate that inflation will have already receded by then.
• As for the ECB's potential exit from its pandemic emergency asset purchase program, Lagarde told FAZ that she assumes the central bank won't make any further purchases under PEPP starting this Spring. The program isn't expected to end completely, as reinvestments will continue, she said.
• Earlier this week, Politico reported that the ECB staff union proposed a salary hike to offset rising inflation