MNI BRIEF: Geopolitical Shifts Risk To Inflation Fight-Lagarde

The potential fragmentation of the world into competing blocs lead by the U.S. and China could prompt fears over unstable supply chains and complicate monetary policymakers’ fight against inflation, European Central Bank President Christine Lagarde said in New York Monday,

Independent central banks "can and will go ahead with ensuring price stability," Lagarde said, noting this can be achieved at a lower cost if other areas of public administration cooperate in replenishing supply capacity. But if fiscal policy focuses on supporting incomes to offset cost pressures, "that will tend to raise inflation, increase borrowing costs and lower investment in new supply," she added. (See MNI:Fast Return To 2% Inflation Difficult-Greek Cenbank Deputy)