The Economist: European Central Bank President says markets may be too optimistic about the Iran situation

According to an interview with The Economist, European Central Bank President Christine Lagarde warned that one must not be complacent when assessing the impact of the Middle East conflict.

Lagarde cited the current state of damaged energy infrastructure, saying, “We are facing a real shock that may exceed our current imagination.”

When asked about the financial markets’ reactions, she said, “Perhaps they are overly optimistic and stubbornly believe that things will head in a positive direction, and we can return to normal in a relatively short time.”

However, she stated, “Technical experts have told us that the situation regarding capacity, extraction, refining, and distribution is not such, because too many facilities have been damaged, and it is simply not possible to recover within a few months.”

Lagarde said on Wednesday that if the current surge in energy costs poses a risk of broader inflation, the European Central Bank would act decisively and swiftly, but it is still assessing the impact of the conflict.

She told The Economist, “In this crisis, we are gradually understanding what the actual consequences are, which countries are most affected, and which commodities will see the highest demand.” She noted that this “leads to a certain lag in the assessment of the severity of the current crisis.”

Massive information and precise interpretation, all in the Sina Finance APP.

Editor: Ding Wenwu