"We are currently in a transition phase: away from a slowflation environment with weak growth and slowly falling inflation at the same time, towards a phase with a high risk of stagflation"

"We are currently in a transition phase: away from a slowflation environment with weak growth and slowly falling inflation at the same time, to a phase with a high risk of stagflation. The duration of the Iran war is decisive for further economic development. If it had been limited to a few weeks, energy prices would probably have fallen again and the inflationary impulse would have been temporary. However, it is becoming apparent that the conflict will drag on for longer. Therefore, there is much to suggest a noticeable surge in inflation that is increasingly becoming entrenched in the value chain and thus also forcing the capital market and central banks to react. Nevertheless, the ECB's wait-and-see attitude does not come as a surprise. President Christine Lagarde had already announced in a speech on April 20 that further information was needed before a change in monetary policy could take place."