ECB’s Lagarde: Prepared to Admit Mistakes Were Made, We Got Transitory Inflation Wrong

20 September 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank President Christine Lagarde admitted on Friday that the ECB had made a mistake by considering inflation to be transitory after the 2022 energy shock.

Speaking at a lecture organised by the IMF, Lagarde said that the ECB was 'prepared to admit when mistakes were made. There is no question that all of us in charge of monetary policy at the time assumed that the energy shock in particular would be a transitory moment.'

The shock's inflationary impact lasted much longer, Lagarde acknowledged, with much deeper effects than initially expected.

‘I had underestimated the strength and value of communication by central banks’, she said.