This is typically what we have in mind when we think about trend inflation. In this world, inflation is meeting the FOMC’s 2 percent target and there is no need for a policy change. Now consider a world in which there are sharp price changes that are staggered across the goods.
Initiatives to foster the developments of the capital market, including the securitisation market, to complement the role of the banking system are particularly useful in the euro area. With respect to securitisation, we have to be aware of the numerous constraints on the revival of ABS public issuance.