Indeed, as I have argued elsewhere, a commitment to a strong nominal anchor is crucial for both aspects of the dual mandate, that is, for achieving maximum employment as well as for keeping inflation low and stable (Mishkin, 2007b).
Policymakers therefore need to closely monitor information about underlying inflation and longer-run inflation expectations, and the central bank must be ready  6  BIS Review 18/2008  to hold steady or even raise the policy rate if the evidence clearly indicates a significant rise in inflation expectations.