And it rests on the notion that the optimal monetary policy response to shocks with a view to ensuring price stability always depends on the specific nature and size of the shocks affecting the economy.
Hence, the medium-term orientation gives the ECB the flexibility required to respond in an appropriate manner to avoid that unnecessary volatility may, over the medium term, be detrimental to its own objective of price stability and, ultimately, to social welfare. The two pillar framework, in conjunction with the medium-term orientation of the ECB’s monetary policy conduct has become a distinguishing feature of the strategy.