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Schnabel: Managing policy trade-offs
Russia’s invasion of Ukraine is a turning point for the global geopolitical order. Above all, it brings unspeakable human suffering to the people of Ukraine, but it is also having a marked impact on the euro area economy, raising new challenges for fiscal and monetary policy. Inflationary pressures are rising further from elevated levels, both through higher commodity prices and through new strains on global value chains as sanctions ban trade with Russia. Meanwhile, aggregate demand is suffering from considerable uncertainty, which is weighing on consumer confidence and making firms’ investment and employment ... (full story)