- Cannot ensure that inflation will always be at 2% level
- But must set policy so it converges to the target
- In case of large shocks, risk grows that inflation becomes more persistent
- Trade fragmentation is likely to lead to larger, more disruptive relative price changes
- Cannot provide forward guidance but must be clear about reaction function
Just some token remarks there by Lagarde as she is delivering the opening remarks at an event before other ECB speakers are on the agenda here.
This article was written by Justin Low at www.forexlive.com.
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