European Central Bank (ECB) President Christine Lagarde stated on Thursday that inflation is expected to "remain undesirably high for some time" as global energy prices stay high in the near term. She warned that price pressures are spreading across more sectors in part because of energy price pressures. However, she noted that "in absence of new disruptions," energy costs should stabilize and supply bottlenecks should ease, helped by monetary policy normalization.
Lagarde stated that the labor market remains strong, with a "robust demand." Wage growth has continued to increase gradually over the last few months, but "still remains contained overall," although faster wage growth is expected over time as the economy strengthens. "Most measures of longer-term inflation expectations currently stand at around 2%, although recent above-target revisions to some indicators warrant continued monitoring," she stated.