Christine Lagarde: Monetary policy in the euro area

Karl Otto Pöhl Lecture by Ms Christine Lagarde, President of the European Central Bank, organised by the Frankfurter Gesellschaft für Handel, Industrie und Wissenschaft, Frankfurt am Main, 20 September 2022.

Central bank speech  | 
21 September 2022
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 |  7 pages

I am honoured to deliver the Karl Otto Pöhl lecture this evening on the topic of monetary policy in the euro area.

After a long period when inflation in the euro area was too low, it is now far too high. We are in the tenth consecutive month of record-high inflation rates and we may see this streak continue in the near term.

Inflation is being caused by a series of unprecedented shocks, which have led to turning points in the global economy. As a result, price pressures have proven much stronger and more persistent than originally projected.

In this setting, monetary policymakers must ensure that inflation does not become entrenched and that it returns to target in the medium term. And our policy response will need to account for the special combination of shocks that we are facing in the euro area.

In my remarks this evening, I would like to address two issues.