Both the real economy and the financial markets, moreover, have coped well with the tightening of monetary policy. To hesitate now, to end the tightening at an early stage, or even loosen monetary policy, would be a cardinal error. This is because there would be a grave danger of the strong level of inflation eating further and further into our lives.
Of inflation becoming entrenched at an elevated level. And there would still be the risk of longer-term inflation expectations becoming deanchored. Since the summer of 2021, market-based indicators and expert surveys have been showing significant increases. However, survey-based, longer-term expert expectations have been going back down towards our target of late.