First, we need to bring rates into “sufficiently restrictive” territory to lock in our policy tightening. Second, we need to communicate clearly that we will stay “at those levels for as long as necessary”. This will ensure that hiking rates does not elicit expectations of a too-rapid policy reversal and will allow the full impact of our past actions to materialise.
And all the while, we need to carefully evaluate the strength of policy transmission in order to avoid an error in calibrating policy in either direction. Conclusion Let me conclude. Monetary policy currently has only one goal: to return inflation to our 2% medium-term target in a timely manner. And we are committed to reaching this goal come what may.