A central bank systematically looking forward – and never pausing to reflect on its past record and the way this might be perceived by its public – might expose itself to the risk that past deviations of inflation from the medium term objective, by compounding over time, might endanger credibility and thus undermine the very foundations of the monetary institutions in place.
The ECB’s monetary policy strategy, with the primacy that it assigns to price stability, forces policymakers to systematically pause and reflect, not only on the future design of policy, but also on past achievements. As I said, the past is a standing guide to orient expectations and is an instrument to maintain credibility.