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ECB shouldn’t overreact to temporary inflation spike, Lagarde says By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO. The European Central Bank logo, Frankfurt, Germany. January 23, 2020. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) – European Central Bank President Christine Lagarde continued play down inflation worries on Tuesday and warned against overreacting to a temporary spike in prices.

She stated that it was crucial to not react to short-term supply shocks which do little for the medium term and to foster positive demand that can sustainably boost inflation towards the 2% target.

She said, “We won’t react to headline inflation increases that are not durable or reflected in the underlying inflation dynamics.” “We see no signs that this increase in inflation is becoming broad-based across the economy

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