Which choice is worse?

The European Central Bank currently has the choice between: Not reacting to inflation ; this avoids depressing investment, having to switch to a restrictive fiscal policy and taking the risk of a recession; Conducting a strong anti-inflationary policy to get rid of inflation, but at the cost of a significant weakening of activity. We always have to keep in mind that to fight inflation, the unemployment rate must be driven above the structural unemployment rate. The choice between one or the other policy depends mainly on the expected dynamics of inflation. If the ECB believes that inflation will gradually decline, even slowly, it may prefer a weak response to inflation, but if it believes that there is a risk of inflation running out of control, then it should prefer a strong inflation response. The problem is that it is very difficult today to choose between the two scenarios . Also, getting the scenario wrong has serious consequences in both cases: pointless recession if the ECB reacts to inflation when it is likely to fall by itself; loss of control of inflation if it gets out of control and the ECB fails to react.