53 days ago • Posted by Paul de La Baume
European Central Bank Chief sees higher inflation behind us
ECB President on Friday suggested Eurozone inflation is transitory and most likely peaked after November’s reading of 4.9%, well above the 2% target set by the ECB. According to Lagarde, 55-60% of recent inflation came from rising energy prices, which should decline by the end of 2022 (excluding energy, inflation reads 2.5%). Lagarde also noted the ECB had more tools available to continue to provide favorable conditions, after the expected end of asset purchases in March 2022. The comments imply that the ECB could remain very accommodative for longer than previously anticipated and could in turn continue to pressure the EUR.