It is in the situation of having to acquire credibility before being able to establish a track record of policy results over a period of some years. It is therefore in the ECB’s own best interests to convey, in a clear and convincing manner, the intentions behind the monetary policy being pursued.
Recent research on data uncertainty has also strengthened the case for a cautious, gradual approach to monetary policy as advocated by William Brainard as early as 1967. In particular, this research has taught us that monetary policy makers should not react strongly to first releases of data which could easily be revised.