At the same time, the strategy review made it clear that the objective is symmetric, meaning that positive and negative deviations from 2% are equally undesirable.4 How economic agents assess future price developments influences their behaviour – for example, purchasing decisions among households, wage negotiations between wage bargainers, or pricing policies of enterprises.
If private agents expect inflation to stand at 2% over the medium term, and if this expectation is reflected in their economic decisions, it will be that much easier for the central bank to achieve its objective. Its monetary policy is thus more efficient. This means that the desired effect can be achieved with less use of instruments.