The ECB also takes note of estimates of the natural rate of unemployment but recognizes that these are subject to enormous uncertainty – like estimates of all other “natural” variables. The ECB would not tighten policy based solely on an estimated unemployment gap. 2. How could we clarify the price stability objective? The main substantive change by the FOMC is the introduction of an inflation make-up strategy. Rather than being solely forward-looking, the FOMC will, or could, now correct for past inflation shortfalls. Let us here also discuss the areas  Page 5 sur 10  of continuity as Jay Powell did in his speech of 27 Augustv – and the possible differences:  The Fed confirmed our common strategy of inflation targeting and it has kept 2% as its numerical goal. This “conceptual convergence” remains a cornerstone of modern central banking.  Average inflation targeting is a flexible tactic, possibly temporary, within a wider strategy of keeping inflation sustainably where expected. Still more importantly in my view, the inflation target should be perceived as flexible, symmetric and medium term. Allow me to be a bit more specific about these three requirements. o flexible is the most obvious one. We cannot guarantee to achieve precisely our numerical objective either all the time or straight away. o Symmetric means that our numerical objective is a target and not a ceiling. As a consequence we might be ready to accept inflation higher than 2% for some time, without mechanically triggering a tightening of our monetary stance.
For example, the Governing Council has recommended that owner-occupied housing will in due course be included in the Harmonised Index for Consumer Prices. The ECB also understands the importance of factoring in the impact of climate change. There is 1/2  BIS central bankers' speeches  now an action plan on how the ECB will more systematically reflect climate change considerations in its monetary policy operations. This is not only about the moral imperative. Bear in mind that the physical and transition risks related to climate change affect not only price stability but also financial stability, having an impact on the value as well as the risk profile of assets held on the Eurosystem’s balance sheet. This is why the ECB will enhance its analytical and macroeconomic modelling capacities, while developing appropriate statistical indicators. Another aspect to emerge from the review was the importance of communication. Monetary policy communication has become a tool in its own right – and the communication needs to be understood not only by experts but also by the public if the ECB wants it to be effective. A number of changes will be made to the statements issued following monetary policy decisions, which should achieve this aim. And last but not least, the extensive feedback received from the review process has highlighted the importance of the exercise given the rapid changes in the global economy. The new review should not wait another 18 years.