In this context, Wieland does not see energy prices as the trigger for high inflation. "The Ukraine war has acted as an accelerant, pushing energy prices even higher," he said.
According to Wieland, the European Central Bank (ECB) plays an essential role. "The loose monetary policy helps keep inflation high for longer." The bond-buying programs have largely financed Eurozone countries' debt indirectly in monetary terms, he said. "Governments have mainly used the money to finance transfers to households and companies. If that doesn't lead to inflation, what will?" said Wieland.
He also warned of risks to financial stability as a result of the central banks' zero interest rate policy and securities purchases, which led to asset price inflation, i.e., higher prices for stocks, real estate or bonds. "There may be abrupt corrections in asset prices, and interest rate risks are building up on bank balance sheets." Next year, Wieland still expects 5 to 6 percent inflation. "But for that to happen, the ECB will also have to raise interest rates significantly."
FAZ: "Warum die Inflation jetzt so hoch ist" (€)