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European Central Bank governing Councilor Nagel on Wednesday reiterated calls for further tightening of monetary policy, but added that he was “cautious” about declaring a new era of high interest rates as the outlook remained uncertain.
A key lesson the ECB can learn from the high inflation of the 1970s is that it should not react too timidly to inflation, let it go prematurely, and let expectations of future price growth become unanchored.
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