For precisely this reason, we – the members of the Governing Council of the ECB – did not disregard the influence of the current inflationary surge by taking a “wait-and-see” approach in the euro area. Ultimately, the losses we as euro area policymakers incur by consistently missing our inflation target come at our own peril.
Inaction – or weak action – in our fight against inflation would have backfired as it would have eroded the public’s confidence in our commitment to price stability. Our timely response was key in keeping inflation expectations close to our target. Nevertheless, current inflation rates in the euro area remain too high.