Monetary policy is expected to tighten even more in the coming months, thus raising interest rates further beyond neutral levels. © DNB  Current monetary policy is geared towards curbing demand, thus keeping inflation expectations anchored. The ECB is using higher interest rates to bring demand in line with more limited supply, thus creating a balance that will contribute to price stability.
The first is convergence: headline inflation has to be on course to reach our aim over a meaningful definition of the medium term. The second is confidence: we need to be sure that this upward adjustment in inflation has a sufficiently high probability of being realised.