Transitory, temporary, ephemeral, provisional… These synonyms characterize a short-lived event. But compared to what? A day is a short time compared to a year. And a year against a century. These words have been used many times to describe the period of high inflation that we are going through.
Just under a year ago, on October 16, 2021, ECB President Christine Lagarde declared that “inflation is largely transitory”, as the eurozone saw a price increase of 3.4 %. The Banque de France announced in September of last year that it was expecting a peak in inflation by the end of 2021.
It’s July 2022 and last week the US Department of Labor announced that consumer price inflation in the US accelerated last month to a 40+ year high due to high levels of prices at the pump and in food.
US inflation reached 9.1% in June, and 8.6% for the euro zone. Transient? Not really… To be honest, the economists of the major central banks most certainly did not include the hypothesis of a Russian invasion of Ukraine, thus scarifying the supply of oil and gas, and undermining the global supply of basic food resources.
It would therefore be more prudent to be clear and vigilant when using the terms mentioned above, otherwise the economic sphere will not hesitate to make you pay for it in the event of an unforeseen event. Everything is therefore a question of scale, which our friends who are leaders of the central banks would really need to climb the mass of inflation. See you at the next summit!