ECB follows Fed in tightening monetary policy despite rising inflation

FRANKFURT – The European Central Bank will continue to lag behind the Federal Reserve in tightening monetary policy despite rising inflation, ECB President Christine Lagarde said on Thursday, helping push the euro to a nearly five-year low against the dollar.

Ms Lagarde’s comments, which came despite increasingly clear signs that the war in Ukraine is fueling already high fuel and food prices, also weighed on euro-zone short-dated government bond yields as investors reduced expectations that the ECB will aggressively raise interest rates.