Joachim Nagel: The long shadow of high inflation

Speech by Dr Joachim Nagel, President of the Deutsche Bundesbank, at the 32nd Frankfurt European Banking Congress, Frankfurt am Main, 18 November 2022. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

1 Introduction

Ladies and gentlemen

First, I would like to thank you for the invitation. It is a pleasure and an honour for me to speak here to such a distinguished audience.

A situation where ordinary people in their ordinary course of business are not thinking and worrying about inflation. This is how Alan Blinder once defined price stability.

Unfortunately, we are far from that: Almost everybody is thinking and worrying about inflation these days. The goal of price stability is currently being missed. That's what the numbers tell us, and people are experiencing it first-hand. For many, soaring prices are the most pressing problem in their daily lives. Accordingly, price developments have become the focus of public attention.

The Eurosystem is committed to price stability. We must ensure that high inflation rates do not become entrenched, and that they return to our target of 2% in the medium term. We therefore have to act decisively. And that is exactly what we are doing in the Governing Council. I will go into more detail in the second part of my speech.