In the end, we reaffirmed our first principles. 1 We did so because, in a complex and continuously evolving world that no one can predict with certainty, policy-makers need a robust framework; one that remains appropriate no matter the circumstances. Inflation targeting is disciplined but flexible. It allows central banks to deliver what is expected while dealing with the unexpected.
In this vein, the ECB’s forward guidance has reinforced the negative interest rate policy by stating that the Governing Council expects the ECB’s key interest rates “to remain at their present or lower levels for an extended period of time”.