Lagarde: Energy Prices Main Driver of Inflation, But Not the Only One

Lagarde's distinction matters because it separates a supply-driven energy shock from the more durable wage-and-price spiral the ECB worries about most. The absence of second-round effects so far suggests the inflation impulse has not yet become self-reinforcing, which is the difference between a temporary overshoot and a persistent problem. Whether that remains true as energy costs feed through to wages and services is the open question.