ECB President Lagarde (Q&A), on the balance of risks, says ECB statement no longer refers to the balance of risks; says that guidance what useful during COVID; now ECB lists upside and downside risk components

• There is a debate that goes on in the GC regarding the risks, their range and their extent.
• ECB is not seeing a reduction in the range of risks, but equally, sentiment around the table is that it is broadly balanced.
• Asked if ECB policy is still in a good place, says we are, and inflation is in a good place. 
• Says good place is a factor of whether GC is convinced it will reach medium-term target; ECB can not be hostage to any one data point

Lagarde's comments signal a shift in the ECB's communication strategy, moving from a general reference to balance in risks to a more nuanced distinction between upside and downside risks. This reflects a cautious optimism about inflation and suggests that the ECB feels confident about its policy stance, even amid ongoing debates within the Governing Council. Market participants may interpret this as a tighter grip on inflation expectations, which could influence rates and the euro's trajectory.