Balancing two-sided policy challenges

In our changing and more uncertain world, there are strong winds that threaten to push prices up and down more often and with more force. Our monetary policy has to ensure that inflation does not drift away from our 2% target for too long. Avoiding this is important to make sure people and businesses see our inflation target as an anchor they can trust. So even if inflation moves away from our target temporarily, they can count on us to deliver stable prices over the medium term.

To achieve this, the ECB has to be forceful or persistent in its actions, regardless of whether inflation is too high, or too low. There are risks from both sides. We need to walk that tightrope, always clearly focused on our target.