ECB President Christine Lagarde repeated on Saturday that “inflation is largely transitory”. “Monetary policy will continue supporting the economy in order to durably stabilize inflation at our 2% inflation target over the medium term,” she said. “The ECB is committed to preserving favorable financing conditions for all sectors of the economy over the pandemic period.”
“Once the pandemic emergency comes to an end — which is drawing closer — our forward guidance on rates as well as asset purchases will ensure that monetary policy remains supportive of the timely attainment of our target,” Lagarde said.
Separately, Governing Council member Klaas Knot also said the current inflation is “mostly temporary”. “It is highly relevant to determine whether this is a temporary phenomenon and goes away or not, and whether this becomes a risk and has secondary effects through higher wages and costs, and that is not the case now,” Knot said. “At this moment, we see it as mostly temporary as our economy is reopening after the corona shock and the supply of products is not keeping up with demand.”