European Central Bank (ECB) President Christine Lagarde has stated that the bank is not yet observing significant second-round inflation effects in the euro area. Speaking at a CNN event in Bangkok during the International Monetary Fund’s annual meeting, Lagarde emphasized that the current inflation surge, primarily driven by high energy prices, has not yet broadly impacted the economy.
ECB officials are closely monitoring the economy to determine how much indirect effects from elevated inflation are spreading. Lagarde noted that the bank is assessing the best ways to anticipate whether secondary inflationary pressures are emerging. This cautious approach underscores the ECB’s focus on avoiding premature policy decisions.
The remarks come as policymakers grapple with the challenge of balancing inflation control without stifling economic growth. Lagarde’s comments suggest that the ECB remains vigilant but is not yet alarmed by the prospect of sustained inflation beyond the energy sector.