Economics
ECB to Consider Inflation Overshoot in Echo of Fed Strategy
- Lagarde says tactic could be powerful when interest rates low
- Anchoring of market-based inflation expectations have softened
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European Central Bank President Christine Lagarde said it’s worth examining a Federal Reserve-style strategy that allows inflation to temporarily rise above the institution’s target.
A policy of committing to make up for low inflation after missing the goal for a while “could be examined” as part of the institution’s strategic review, Lagarde said at a conference in Frankfurt on Wednesday.