For Christine Lagarde the peak of inflation has not yet been reached

Christine Lagarde, the president of the European Central Bank, said on Monday that she would be “surprised” to see eurozone inflation peaking.

“I would like to see inflation peaking in October but I think there is too much uncertainty” to assume that is the case, which would “obviously surprise me”.

The uncertainty concerns in particular the “pass-through of the high cost of energy on retail prices”, she pointed out.

In the immediate term, “my best economists (within the ECB)” still see the risk of “rising” inflation.

If the best Lagarde economists who saw nothing coming see inflation continuing to rise, we have a good chance that this is wrong!

And for good reason.

Unlike the ECB, which saw nothing happen, I think we are at the peak of inflation.

Energy prices are therefore constantly receding, inflation has probably reached its maximum at a few hundredths of a loan.

The only thing that can cause inflation to rise again is either an extension of the conflict with Russia or another significant rise in oil or gas.

Christine Lagarde also indicated that in this context interest rates “are and will remain the main tool for fighting inflation”.

Rates in the euro zone should therefore rise rapidly towards 3%.

Charles SANNAT

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