“Since the pandemic, we’ve been living in a world where the economy has been driven by very different forces,” Federal Reserve Chair Jerome Powell said on a panel moderated by Bloomberg Television’s Francine Lacqua.Alongside him, European Central Bank President Christine Lagarde concurred that she doesn’t think “that we are going to go back to that environment of low inflation.”
Central bank officials from across the globe are gathered at the ECB’s first such hillside retreat since before the pandemic against a backdrop of, threats to economic growth and the possibility of further energy disruptions. Lagarde observed, with a hint of nostalgia, that things just won’t be the same.
“It’s how you deal with a series of large supply shocks with no air gap between them, which of course feeds through into expectations,” he said. “Put them all together, they’re not transitory in the traditional sense of the term.”