So there would be some risk of inflation remaining uncomfortably high were demand growth to be unexpectedly strong in the near term. Hence the outlook for demand, and the extent to which capacity constraints are easing in a range of sectors, must be key elements in forming a judgment about the outlook for inflation, and the appropriate stance of monetary policy.
•  Excessive or premature tightening can mean loss of growth and welfare. •  Excessively loose regulation can result in financial instability. •  Drawing the right balance requires fine judgement. •  Ability to make the right judgment is a key attribute of a knowledge institution. BIS central bankers’ speeches  21. 2nd attribute: ability to make intelligent, mature and balanced judgment.