Lagarde: Widespread transmission of energy prices is more like an exception than the norm.

European Central Bank President Lagarde: The widespread transmission of energy prices seems more like an exception than the norm. If an impact leads to a significant but not very persistent deviation from the target inflation, then some cautious policy adjustments may be reasonable. When the degree of inflation deviation from the target intensifies and becomes more persistent, the reasons for taking action become increasingly sufficient. We must clearly understand when high energy costs will spread to widespread inflation. Early warning signals of shocks being integrated into a more widespread inflation dynamics must be closely monitored.