«Central banks have responded» to the return of high inflation globally «by tightening monetary policy and, even if progress is being made, the fight against inflation is not yet won». This was stated by the president of the ECB, Christine Lagarde, in her speech at the economic symposium in Jackson Hole in Wyoming. Therefore, Lagarde underlines, the ECB must keep rates at a “sufficiently restrictive level for the time necessary” to achieve a “prompt return of inflation to the 2% target”.
According to Lagarde there are three key elements for the ECB «clarity, flexibility and humility». “First of all, we need to clarify our goal and the constant commitment to achieve it” and “clarity will be important to establish the appropriate role of monetary policy in the transitions underway”, he points out, adding that “faced with a changing world monetary policy should not itself become a source of uncertainty. «This – he points out – will be essential to keep inflation expectations firmly anchored even in the event of temporary deviations from our target, as could happen in an economy more subject to shocks. And it will also be key to maintaining public confidence that, even in a new environment, we will not lose sight of our goal.”
In the last three years, people around the world have experienced a series of unprecedented shocks, albeit to varying degrees. We have faced the pandemic, which brought about a partial shutdown of the global economy. We are facing a war in Europe and a new geopolitical landscape, leading to profound changes in energy markets and business models. And climate change is accelerating, forcing us to do everything we can to decarbonise the economy. A visible impact of these changes has been the return of high inflation globally, which has caused suffering for many people.
2023-08-25 20:26:15
#Lagarde #fight #inflation #won
