We will continue doing so until the inflation outlook has stabilized around our 2% target in the medium term. This can however hardly be considered a walk in the park. First of all, some of the most important inflationary drivers are of an imported nature.
This not only makes us collectively poorer as we spend more euros or koruna’s abroad, but also makes inflation more complicated to control. Secondly, central bankers are having to walk a tight rope between controlling inflation and preserving financial stability. In the aftermath of the pandemic, debt levels and asset valuations peaked. Both make our system vulnerable to disorderly market corrections and cross-border spillovers.