In the case of direct inflation targeting, there is the risk that the outside world does not comprehend which indicator has been used this time, a problem which can be solved to some extent by issuing inflation reports.
Fourthly, policy should not be tailored to individual developments, but should have a medium-term orientation, providing some breathing space when the target is not met in the short term. Above all this means that policy should be credible, offering a clear anchor for inflation expectations. Irrespective of the strategy chosen, monetary authorities do not react to every news item which comes their way.