I’m calling this component “d”, because it is associated with credit default risk. But I’ll leave the “d” factor aside for now and I will come back to it at the end. Measures of performance How well has the ECB managed the transmission mechanism and the macroeconomy? Since the inception of the single currency the ECB has fulfilled its price stability mandate.
Taking the long-term average as a performance indicator, inflation rates in the euro area have been on average a few basis points above 2%. You can see their exact evolution over time on this slide [4]. The slight overshoot relative to our aim – close to, but below, 2% – is due to the recent renewed pressures on volatile components of the price basket.