I believe, it was a good thing that the Governing Council adopted more explicit forward guidance last July, when the chairman stated that interest rates would remain at the level prevailing at that time or lower for an extended period of time. This new type of communication provided since last summer has proven effective, as the inflation outlook continued to dampen this autumn.
First, it would reflect improved performance and expectations for the world’s largest economy. Second, it would reduce the possibility that excessive risk-taking puts the world financial system in danger of disarray. Furthermore, monetary policy has its limits. Expansionary monetary policy cannot be sustained forever.