As I see it, this illustrates yet again the ongoing pressure on monetary policymakers to take action. Moreover, inflation could be fuelled further if corporate profits and wages increase more strongly than expected. To sum up: The surface of our engine isn't quite as hot as it used to be.
But at its core, it is still overheated and needs to be cooled down further. 4 Orderly transmission of monetary policy So far, I have explained how we expect the economy and inflation to develop. In addition, we are also analysing how financing conditions in the euro area are changing. The financial sector plays an important role in the process of monetary policy transmission.