While our measures have clearly played a decisive role in keeping inflation expectations anchored and have contributed to an improved inflation outlook, an ample degree of monetary accommodation remains necessary to secure a sustained return of inflation rates towards levels that are below but close to 2%, as reaffirmed by the Governing Council at last week’s meeting.
Despite the strong cyclical momentum, domestic price pressures remain subdued, as do measures of underlying inflation. The evolution of the ECB’s forward guidance Our monetary policy stance is determined by the combination and mutual interaction of our asset purchase programme, our policy rates and our forward guidance on each of these tools.