We then ask ourselves what are the circumstances under which we would wish to change monetary policy. Would we do it if our forecast for inflation rose from 2½% to 2¾% or fell to 2¼%? My answer is that we do not worry about small variations in inflation of that magnitude.
A significant rise in global inflation is therefore not foreseen, particularly in view of continued strong productivity growth in some of these countries combined with a tightening in monetary policy stance. After keeping the federal funds rate unchanged since the middle of 2003, the US Federal Open Market Committee raised this rate by 25 basis points to 1,25 percent on 30 June 2004.