If the economic outlook rapidly deteriorates, the ECB chief economist may need to reevaluate their policy.

• In March, preliminary data showed that the euro area experienced inflation of 7.5%.
• Recently, headline inflation has reached new highs, with a rate of 5.9% recorded in February.
• Moreover, experts estimate inflation will rise even higher going forward.

On Friday, European Central Bank Chief Economist Philip Lane admitted "very high" inflation in the region and suggested the Frankfurt institution may need to reconsider its policy stance.

In March, preliminary data showed the euro area's inflation reaching a record high of 7.5%. This follows the recent record of 5.9% in February. Experts predict that inflation will continue to rise in the future.

If the medium-term inflation outlook is maintained, the ECB will end net asset purchases in the third quarter, according to Lane's statement on CNBC Friday.

If the inflation outlook weakens due to a deteriorating outlook, we may need to reconsider our plans, he stated.

The ECB had announced that it would end its quantitative easing program in the third quarter due to higher inflationary pressures. However, the central bank is now facing a crossroads due to Russia's unprovoked invasion of Ukraine, which has brought new economic challenges, including rising energy and food prices.

One of the challenges the ECB faces is dealing with high inflation rates while considering slower economic growth.

Lane stated that there are opposing forces at play. On one hand, the energy shock and the possibility of second-round effects pushing up inflation create a positive pressure on the inflation outlook. On the other hand, the weakening of sentiment due to the fact that real incomes will suffer with high energy prices over a one or two-year horizon creates a negative pressure on the inflation outlook.

As a result, there will be a significant amount of work, analysis, and debate regarding the net impact of opposing forces.