[Note 4] Aside from the risks of disanchoring inflation expectations, I have a second argument for being resolute in the pursuit of price stability. And this has to do with demand factors in recent inflation dynamics. Obviously, in the euro area context supply factors are highly relevant. But two types of evidence point to an additional, significant role of demand factors.
First, inflationary pressures have increased across the board, and not only for energy and traded goods affected by strained supply chains and the war in Ukraine. This broadening of inflation to a wide spectrum of goods and services points to aggregate demand factors also being at work (Figure 5).