Report
Patrick Artus

If there is really drastic stagflation in the euro zone, what would the ECB do?

Drastic stagflation in the euro zone would result in particular from the cessation of Russian natural gas imports: the euro zone would be in recession, and inflation would be very high, in double figures. What would the ECB do in this situation? The financial markets' response is that the ECB would prioritise a response to the recession and stop raising interest rates; The reality would probably be very different, with the ECB being forced to respond to high inflation, as European central banks did in the early 1980s.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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