Federal Reserve Chairman Powell and ECB President Christine Lagarde released their eagles at the annual monetary policy forum on Wednesday and expressed doubts about whether they could return to the low-inflation environment before the epidemic, Zhitong Financial APP learned.

Mr Powell reiterated his hawkish argument that the US economy was strong enough to cope with tighter monetary policy, that households and businesses were financially sound and that the labour market was "very strong" and that a recession should be avoided. He said the Fed is committed to raising interest rates without triggering a recession to curb inflation while maintaining a strong and stable labour market.

Mr Powell warned that while he thought it was possible to raise interest rates without triggering a recession, "it would be quite challenging." "there is no guarantee of a successful soft landing, and the path to a soft landing has become narrower," he said. "

But Powell still showed determination to fight inflation. He said that while there was a "real risk" that the Fed's tightening policy would slow the economy too much, "the biggest mistake would be failure to restore price stability." "the Fed will not allow the transition from a low inflation environment to a high inflation environment," he stressed. The most dangerous thing is to make high inflation deep-rooted and persistent. The partial reversal of the Treasury yield curve is not the primary concern at the moment, and the Fed is focusing on reducing inflation.

At the same time, Powell said: "since the outbreak, we have lived in a world where the economy is driven by very different forces." "what we don't know is whether we will return to the low inflation environment as before."Powell believes that the impact of globalization, an aging population, low productivity and technological development have all made prices no longer "ultra-low".。

In addition, Powell says it may be too early to tell whether high inflation will become a more lasting feature of the global economy. He pointed out that economists' existing models failed to predict the large-scale supply shocks that were the main cause of the surge in inflation. "this process may also be reversed, and inflation may fall rapidly". "We are more aware of how little we know about inflation."

Lagarde also mentioned at the forum that the era of low inflation before the outbreak may be gone forever. "the epidemic and the massive geopolitical shocks we now face have released forces that will change the environment we were once familiar with and the context in which central banks design policies," she said. " She also warned that"the era of ultra-low inflation before the epidemic is unlikely to happen again, and we can't go back."Ms Lagarde said that manufacturing "getting things done on time" had been a downward force in curbing inflation over the past two decades, and that this era of change would herald more upheaval.

On monetary policy, Lagarde said that the economic recovery is under way, driven by the service sector, the ECB is expected to raise interest rates twice in the third quarter from July, and must be prepared for more action if necessary. at the same time, interest rates should be raised gradually to deal with a high degree of uncertainty.

It is worth mentioning that when asked whether the "gradual rate hike" did not mean a big 50 basis point hike at once, Ms Lagarde denied that the possibility of 50 basis points had been completely eliminated and said that "as the uncertainty recedes," the ECB is likely to act more decisively. The ECB is widely expected to raise interest rates in July for the first time since 2011 and further in September to withdraw from its negative interest rate policy since 2014.