Many observers and commentators have characterised us and our monetary policy as facing a dilemma – or even a trilemma – as we simultaneously confront high inflation, a slowdown of economic activity and threats to financial stability. How have we addressed these challenges at the ECB? Has the ECB ever been in a dilemma – or trilemma – situation?
High inflation and the uncertainties related to the war are also weighing on their confidence. Surveys show that consumer sentiment has deteriorated considerably. Households could be putting off purchases for precautionary reasons. The Russian attack on Ukraine has added new layers of risk. When the attack began, Germany and the euro area expected a strong recovery from the pandemic crisis.