Fabio Panetta: Playing the long game - how should monetary policy adapt to the Great Reconfiguration?
Speech by Mr Fabio Panetta, Governor of the Bank of Italy, at the closing conference of the ESCB Research Network on "Challenges for Monetary Policy Transmission in a Changing World (ChaMP)", hosted by the Bank of Italy, Rome, 7 July 2026.
Source: BIS Central Bank Speeches
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DW NOTE
Panetta delivered this speech on July 7. The Strait closed on March 31. He's calling persistent geopolitical disruption a "defining feature" that alters monetary transmission — but the ECB's June inflation target was met before the speech, and the Fed held rates through July despite a supply shock that should have forced tightening. Central banks aren't adapting their reaction functions to the Great Reconfiguration. They're waiting for it to go away.