ECB’s Lagarde Says Profit Margins Should Weaken Over Medium Term

European Central Bank President Christine Lagarde said corporate earnings that are increasingly being blamed for driving euro-area inflation won’t stay as high as they are currently.

“Profit margins are expected to weaken over the medium term owing to the monetary policy-induced easing of demand pressures, some catchup in real wages and further improvements in supply constraints,” Lagarde said in a letter to a European Parliament lawmaker published Friday.