ECB's Schnabel says that the memory of high inflation remains fresh, and inflation expectations could be more fragile
Importance
Level 1
- Can afford to take time to analyse the Iran shock.
- We are in a relatively favourable position because we were successful in bringing down inflation to 2% before the war started, have monetary policy stance that is broadly neutral.
- To carefully consider data that may indicate inflation becoming entrenched or having second-round effects.