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Lagarde Defends Staff Inflation Projections

ECB

Q: Is the end of the APP a time to adjust the forward guidance policy?

  • A: We have changed the forward guidance with respect to asset purchases.

Q: How firm are your beliefs that you will succeed in reaching the inflation target given the poor historical record of doing so?

  • A: How confident are we about our projections? Our staff does the best work they can and apply their whole consciousness and professionalism to producing projections. The projections are not just the ECB's, they are the projections of the entire eurosystem.
  • The War, the massive energy price increases and fast recovery have taken all forecasters by surprise. All international institutions have made the same mistake. We are the only central which has gone back to understand where the errors have come from. Three quarters of forecasting errors are attributable to energy price surprises, and the remainder owes to supply bottlenecks lasting for longer than expected.

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