Bundesbank’s Nagel stresses final push to inflation target as toughest hurdle

Bundesbank President Joachim Nagel likened the journey toward ECB’s inflation target to an arduous “last mile,” which “may well be the hardest”.

Nagel pointed out that a key strategy for businesses would involve absorbing recent wage hikes—a move that will necessitate accepting slimmer profit margins.

On the other side, he emphasized the necessity of a more restrained fiscal approach from governments.

While wage increases are anticipated to exert some pressure on pricing, Nagel reassured that currently, there’s no sign of a “self-reinforcing spiral” in wage-price dynamics. This suggests a cautious optimism that, while the path forward is steep, runaway inflation is not an imminent threat.