All this, of course, without any concession to instances of “fiscal dominance”, in the spirit of working independently but maintaining a dialogue with euro-area governments. A cautious approach is also advisable due to a series of considerations.
The first is related to the high level of economic uncertainty and the Brainard principle, which states that when the central bank is uncertain about the effects of its actions, it should move conservatively.19 An exception to this principle is in the case of substantial uncertainty around the persistence of inflation.