ECB’s Lagarde: ‘We Will Return to an Inflation Rate Close to 2%, But When?’

25 August 2022

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday said that inflation would return to 2% but that it was uncertain when and that staff macroeconomic projections by themselves could not be relied on.

In an interview with French women’s magazine Madame Figaro conducted on July 13 but only published today, Lagarde said, ‘I’m not concerned about the outcome – I know we will return to an inflation rate close to 2%, but when? Over what time period? And what will the impact be?’

‘We can no longer rely exclusively on the projections provided by our models – they have repeatedly had to be revised upwards over these past two years’, she continued. ‘There are things that the models don’t capture.’

Policymakers' judgement had to play a role as well, she said.