Lane says that if the rise in energy prices persists, maybe it will hit consumption in the autumn but it remains an uncertain issue.
The framing is interesting here because suggests the burden of proof is now on the negative side. Oftentimes, central bankers bake in some weakness in non-energy spending in a price spike but Lagarde this week emphasized the resilience of the economy and consumption.
Now there is a question if the ECB hikes back-to-back and right now the odds are slightly over 50%.
More comments:
- Wages are not responding much to the energy shock
This article was written by Adam Button at investinglive.com.