European Central Bank Governor Christine Lagarde said on Wednesday that they cannot guarantee that the inflation rate will stabilize at 2% permanently, but she added that they must guide monetary policy to converge towards 2%, according to Reuters. < p dir="LTR" style="text-align: justify;">In addition, Lagarde stated that the risks of sustained high inflation are increasing in the event of major shocks, adding that retail trade is likely to lead to relatively larger and more volatile changes in prices; issues related to trade, defense, and climate may contribute to rising inflation. < p dir="LTR" style="text-align: justify;">Accordingly, the European Central Bank Governor clarified the necessity of paying special attention to stabilizing inflation expectations, and Lagarde stated that future guidance cannot be provided but it should be clear regarding the reaction function.
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