Thus, the interplay between inflation and wage growth – with an important role for inflation expectations – is something that we will carefully continue to monitor in the period ahead. Similarly, in the pursuit of our mandate, we diligently monitor whether the prevailing financing conditions remain consistent with inflation reaching our 2% objective in the medium term.
The Russian invasion of Ukraine and the subsequent financial sanctions have clearly caused substantial volatility in financial markets. However, these factors have so far not caused severe strains in money markets or liquidity shortages in the euro area banking system.