Lagarde Says ECB Shouldn't Tighten Policy Too Soon

The video addresses concerns about inflation, emphasizing its impact on real incomes, especially for lower-income groups. It highlights the importance of a persistent monetary policy to achieve a sustainable return to the inflation target, particularly when interest rates are low. The current inflation is driven by pandemic-related factors, which may slow economic recovery. The strategy involves being patient and vigilant to ensure inflation stabilizes at the 2% target in the medium term.

What factors are contributing to the current inflation according to the text?

What approach should monetary policy take in response to the current inflation situation?