Increased inflation expectations are cause for concern and monetary authorities must not react insufficiently or hesitantly, European Central Bank Governing Council member Joachim Nagel said on Thursday. In a speech at a conference on monetary policy and expectations of households and firms, Nagel, who heads the German Bundesbank, argued that there were price stability risks, citing the ‘somewhat less anchored’ nature of German households’ and firms’ expectations of average inflation over the next five years. The increase in these expectations was ‘worrying’, he said. The Bundesbank also examined long-term ... (full story)