ECB President: Eurozone Inflation at Record High but No Need to Panic

Data released by Eurostat on the 16th local time showed that the final inflation rate in the eurozone in September this year was 3.8%, higher than 3.2% in August, consistent with the preliminary value announced earlier this month, and the highest level in three years. Recently, European Central Bank President Lagarde said that there are two signals that have not yet been seen, and once they appear, the European Central Bank will need to take action. Lagarde said that the inflation data need to be broken down, and a large part of the increase stems from energy factors, with energy prices rising by 18.8%. This will have an impact on overall prices, and what is particularly worrying is whether this round of energy price increases will be transmitted to the entire economic system and produce second-round effects. At present, we have not yet observed the above phenomena. Current short-term inflation expectations have already risen somewhat, but medium- and long-term inflation expectations remain broadly at the 2% level. If medium- and long-term inflation expectations continue to rise from the current level, or if there is a clear signal that second-round inflation effects are emerging, then action will need to be taken. At present, our measures are reasonable.