The latest decisions of the Governing Council have shown its determination in the face of a continuously weakening outlook for growth and inflation. Consistent with our monetary dominance framework, these decisions are intended to ensure that inflation returns to our objective without undue delay.
But if fiscal and structural policies also play their role in parallel – and more so than we see today – the side effects of monetary policy will be less, and the return to higher rates of interest will be faster. Timely and effective policy actions, however, are of the essence.