The scale and speed of the rise in inflation since the middle of 2021 constitutes a major shock and has created an environment in which there is more intense questioning of the future inflation path. The longer and larger the deviation from the two percent target, the greater the risk that medium-term inflation expectations become de-anchored.
All else equal, the monetary policy that stabilises inflation at target in a timely manner is also the monetary policy that stabilises expectations at target.