This time it was Mario Draghi, former president of the European Central Bank and former Italian prime minister, who warned the ECB led by Christine Lagarde about the risk of pushing euro-area interest rates higher than necessary. Draghi is usually reluctant to comment on monetary policy decisions made in Frankfurt.

Draghi’s message to Lagarde: the rate path should not be higher than required

Speaking in Zurich at the Swiss National Bank’s annual Karl Brunner lecture, Draghi issued a clear appeal to the Eurotower on October 1, 2026:

«The path of policy rates should not be higher than required to stabilize inflation over the medium term.»

With those words, Draghi urged Lagarde not to raise the euro area’s cost of money to a level that could threaten Eurozone growth, while reiterating the need to rein in inflation, which the latest data show accelerated further in September.

Just days ago, Italy’s national statistics office Istat announced that its preliminary estimate of Italian consumer prices pointed to a jump in headline inflation to +4.2%.

Draghi to the ECB: “first priority is controlling inflation,” but avoid making growth weaker than it needs to be

Staying vigilant on inflation is essential, Draghi suggested, recalling that «the first priority is to control inflation.»

But there is also a «second priority,» the former premier added. Draghi is also known as “Mr. Whatever It Takes,” the central banker who spoke of the irreversibility of the euro during the bloc’s sovereign debt crisis. That priority is «to avoid making growth weaker than it needs to be.»

Draghi: “the stakes are high because growth is sensitive to the expected rate path”

Draghi explained that, while «in the face of inflationary shocks, monetary policy cannot take responsibility for growth,» the ECB «can ensure that the path of policy rates is not higher than required to stabilize inflation over the medium term.» That approach, he noted, «is consistent with giving priority to price stability.»

In short, Draghi stressed that the ECB must not forget to protect euro-area GDP growth, and he presented figures showing how expectations of rate hikes alone could choke Eurozone expansion.

After stressing that «the stakes are high, because growth is sensitive to the expected path of rates,» Draghi pointed out that «forecasts suggest that the short-term rate increases expected since the end of last year will reduce growth, overall, by 1.1-1.3 percentage points over the 2026-2028 period.»

His other warning: «the effects of monetary tightening can last longer than the tightening itself.»

Draghi’s recommendations come during a period of heavy turbulence in global government bond markets, triggered in part by fears of further interest rate hikes from the major central banks, the ECB first among them.

Draghi’s warning ahead of the next ECB meeting, and what Goldman Sachs expects

The warning comes ahead of the ECB’s next meeting, scheduled for October 28-29, 2026, in Frankfurt. The rate announcement is due on Thursday, October 29, 2026, at 2:15 p.m. CET, followed by the press conference at which Lagarde will take questions from journalists.

Meanwhile, inflation keeps surging across the euro area, as confirmed by Spain’s preliminary September reading of 4.9% year on year.

At its last meeting, on September 10, the ECB announced its second 25-basis-point rate hike of 2026. As a result, the deposit facility rate, the main refinancing operations rate and the marginal lending facility rate rose to 2.50%, 2.65% and 2.90%, respectively. «An expected decision,» Lagarde herself said. The phase suggests the hikes are not over, especially given the ECB’s new, more hawkish economic projections for GDP and inflation.

Still, note the latest estimates from Goldman Sachs economists. In a report dated September 25, the bank’s research division said that «our economists are “skeptical” that the ECB will keep rates significantly above 3%, as current market pricing indicates.»

Goldman Sachs Research nonetheless expects another 25-basis-point tightening at the December meeting, which would bring the deposit rate to 2.75%.

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on October 02, 2026 as «Tassi BCE, Draghi ha appena lanciato un monito a Lagarde?». It has been translated and adapted for an international audience by the Money.it International desk.