By transitory effects is meant that some particular factors affect the forecast of inflation one to two years ahead, but that the effects are expected to dissipate without the need for any monetary policy action. By large deviations from the target is meant that inflation has deviated so much from the target that there may be reason to bring it back to target over a longer period than the normal two-year horizon. A faster return to target could give rise to undesired fluctuations in output and employment, for example. In practice this approach has often led us to focus our monetary policy analysis and discussion on the inflation measure UND1X, as there is generally always reason to disregard the effects on inflation of indirect taxes and subsidies as well as of changes in interest rates. In some situations we have also decided to study inflation measures from which other price changes have been excluded, e.g. in spring 2001, when the prices of a number of goods such as electricity, heating oil, petrol, telecommunications and different kinds of food rose; and 2003, when it was primarily fluctuations in electricity prices that had a very sharp impact on inflation for a period. Inflation and inflation expectations in line with the target The result of the Bank’s policy can be illustrated in different ways. Let me begin with the most obvious gauge, the inflation outcome.
This might be particularly appropriate for meeting settlement needs in central bank money between financial intermediairies. Indeed, asset tokenization initiatives have proliferated among financial players, with the the risk that such developments may lead to disorderly approaches and heterogeneous adjustments of settlement processes, which are currently mainly handled through market infrastructures. The Eurosystem, as a major provider of critical wholesale clearing and settlement services in euro, should therefore be open to experimenting the conditions under which it makes central bank money available as a settlement asset. To that end, we, at the Banque de France, have started gaining experience with innovative solutions, including in particular recourse to DLT. Experimentation is key in this area and this is why, as already announced by Governor Villeroy de Galhau, the Banque de France will launch a call for projects before the end of the first quarter of 2020. Indeed, we wish to work with industry innovators and 3/4  BIS central bankers' speeches  start running experiments rapidly to possibly integrate a “wholesale” CBDC into innovative procedures for exchanging and settling tokenised financial assets. Another contribution from central banks could be to help address one of the major failings of the current payment systems which is cross-border retail payments. This is one of the drivers of the development of crypto-assets such as stablecoins, and we believe we could help identify and support other concrete, useful and possibly complementary solutions.