The current macroeconomic environment is unprecedented as we tighten monetary policy while facing a higher probability of a global recession. There are costs to firms and households in terms of raising rates with adverse implications for inequality.
However, these factors have to be off-set against the costs of high inflation which if left  untreated in a timely and effective manner, will have far greater macroeconomic consequences. That is why we at the ECB cannot allow ourselves to deviate from our primary objective, which is price stability. Credibility and communication Credibility is a key element of effective monetary policy.