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Keynote speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the annual Homer Jones Memorial Lecture
St. Louis, 2 November 2023
In long-distance running, the last mile is often said to be the hardest. With the finish line within reach, one must push even harder to achieve the long-held goal.
The same could be said about tackling the last mile of disinflation.
Over the past twelve months we have seen the first phase of disinflation. Headline inflation fell rapidly and measurably, as previous supply-side shocks reversed. Dislocations in global supply chains were gradually resolved, and energy and food prices came off their peaks reached after Russia’s invasion of Ukraine. These were the quick wins of the disinflation process.
In my remarks today I would like to discuss why bringing inflation from here back to 2% in a timely manner may be more difficult. I will argue that, unlike during the first phase, disinflation during the last mile hinges critically on the…