Inflation is out of control: Lagarde must step down

Bad news for the pockets of Italians. Really very ugly. Istat announced it in June Inflation accelerated again rises to 8%A level not recorded since January 1986, when it was equal to 8.2%. Not better for the Eurozone as a whole with 8.6% price growth.

this time Unlike the spread For Italians, this is not a “hypothetical” phenomenon that exceeds the costs of refinancing public debt by the state. This time it is a phenomenon that gnaws families into the living body.

The cost of raw materials has been rising for months, and now traces are beginning to be clearly visible even on the so-called “shopping cart”. Food cost is always higher Millions of citizens will begin to struggle until the end of the month.

And the The trap is also triggered on the savings front. At current inflation rates, €100,000 is subject to a loss of €22,000 after 3 years, €34,000 after 5 years and €56,000 after 10 years. Lifetime savings can be halved in a decade.

As is known, there are two main reasons for the price flare-up. It all started with Bottlenecks in the supply chain Or rather, the Asian production and logistics chains that were not able to meet the recovery in demand after the shutdown. This phenomenon began in 2021. In 2022, the situation worsened even more with The outbreak of war in Ukraine Starting from February.

Dynamics also recognized by the President of the European Central Bank, Christine Lagarde. There are forces unleashed by the pandemic and the geopolitical situation that are changing the scenario. I don’t think we’ll go back to low inflationEurotower number one explained.

So the reassuring statements on the French central bank’s rates seem light years away. Only last fall guest from “what’s the weather like” He made it clear to the Italians that “Inflation was temporary“And to grow stronger”It will disappear in 2022“.

The belief that rate increases were “transitional” prompted the European Central Bank to change monetary policy of late. This was certainly a mistake that Lagarde should answer to the Europeans.

to me early June Frankfurt announced that It will raise interest rates for the first time in ten years It will end its main program to buy government bonds Starting July 1. Prices will be raised first to 0.25% and then to 0.5% in September.

As we can see in the graphs below The Federal Reserve started working as early as March. Four months late, that of the European Central Bank, who They have no excuse European citizens are likely to pay a heavy price.

US Federal Reserve interest rates

European Central Bank interest rates

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