Lagarde: Appears We Have Not Reached Peak Inflation

The video discusses the current state of inflation, highlighting that inflation rates have been high, with core inflation also elevated. There is uncertainty about whether inflation has peaked, particularly due to the pass-through of high energy costs. In the long term, inflation is expected to decline due to monetary policy and the resolution of supply bottlenecks. However, current drivers like food, commodities, and energy do not indicate an immediate decline. The ECB perceives risks to inflation as being on the upside and continues to use tools like interest rates to manage it.

How does the text suggest that monetary policy will affect inflation in the long term?

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What tools are mentioned in the text that can be used to tame inflation?

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