The first is related to the high level of economic uncertainty and the Brainard principle, which states that when the central bank is uncertain about the effects of its actions, it should move conservatively.19 An exception to this principle is in the case of substantial uncertainty around the persistence of inflation.
More recent studies, in fact, suggest that when persistence is high, a strong monetary reaction may be required,20 so as to avoid high price growth becoming entrenched in agents’ mind-sets. While this possibility should 18  See Rostagno et al. (2021), chapter 4. 19  Brainard (1967). 20  See Ferrero, Pietrunti and Tiseno (2019).