In line with its mandate, the Council will use all the tools needed to keep actual and expected inflation in line with the definition of price stability in the medium term.
Since both unemployment and inflation were surging at the time, such stringent monetary tightening created both political and social challenges. Despite such difficulties, however, it was quite clear to Chairman Volcker what policy steps he had to take to lower inflation expectations: he had to pursue strong monetary tightening by substantially raising short-term interest rates to contain inflation.