I would argue that American leadership over the past seven decades was of the first, legitimate type.2 In other words, it went largely unchallenged because it was built on shared fundamental values that brought nations around the globe together – the values of human rights, freedom, democracy, equality and the rule of law. These are also the values for which we Europeans stand.
Given the lags with which monetary policy affects the economy, however, we cannot rule out a situation in which a preemptive policy tightening may become appropriate before any sign of actual higher inflation becomes evident.