While this was, given the lags in the transmission of monetary policy impulses, to a 1  BIS Review 35/2000  large extent a reflection of the monetary policies conducted in the run-up to Stage Three, the evolution of all available forward-looking indicators up to now suggests that the Eurosystem has been successful in continuing the previous policies and in maintaining a positive outlook for price stability in the euro area.
In this respect, the quantitative definition of price stability which the Governing Council already published in late 1998 has certainly helped to anchor medium-term inflation expectations to below 2% per year. With regard to the Eurosystem’s primary objective, the maintenance of price stability, the main challenge for monetary policy is to assess the risks to price stability in the future.