Bundesbank President Joachim Nagel said: “The risk of inflation expectations becoming de-anchored has risen over the past months. Risks to price stability exist.”
“Inflation expectations of households and firms in Germany are somewhat less anchored than, say, a year ago,” he said. “The increase is worrying.”
“If monetary policy falls behind the curve, even stronger hikes in interest rates could become necessary to get inflation under control,” Nagel warned. “This would create much higher economic costs.”
