While price stability is important, paying too much attention to the near-term inflation outlook could impair the stability of the financial system, which is critical from the viewpoint of economic stability – the ultimate goal of price stability. The second lesson is the danger of monetary policy swinging too far in the direction of finetuning.
Christine Lagarde: How can a united Europe meet the challenges it faces today? Opening remarks by Ms Christine Lagarde, President of the European Central Bank, during a dinner on "Uniting Europe", World Economic Forum, Davos, 23 January 2020.