I would like to ask you what do you need to see for core inflation actually coming down so it may give you the possibility to pause or to skip – or whatever you want to call it – in September? So, what needs to happen? Then I have a question on the financial conditions. You are saying that they are forcefully tighter. What would you make rethink that it's enough when it comes to tight financial conditions? I wish I could give you the very simple answer where I say when we are there and when financing conditions are such, and the tightening has reached that level for corporates, for mortgages. But unfortunately, it doesn't work like that because what we know is the target that we have – which is price stability as defined by the 2% medium term – added to which we want to be confident that it stays at that target of 2%, which is why duration matters as well. But it is going to be a factor of those three elements that we will be looking at. So, it's the inflation outlook, which is every month, and every three months in particular, informed by all the new financial and economic data that we receive. It's the underlying inflation and the dynamics of it. I can assure you that we look at multiple cuts and subsets of inflation to arrive at what is the corest of the core. We don't limit our review at core; we go further than that.
Finally, as I noted earlier, we followed up in our last FOMC meeting with the release of an addendum to our Policy Normalization Principles and Plans that outlined how our balance sheet normalization plan will work when it is implemented. We also said clearly in the FOMC statement that if the economy evolves in line with our expectations, we expect to begin this process this year. In response, market participants have progressively increased the probability assigned to a change in reinvestment policy this year. Yet, Treasury and agency MBS markets have responded little at the time of these announcements—including those undertaken most recently. To me, this suggests that these communications have generally been effective in fostering an orderly adjustment in expectations about how we are likely to normalize our balance sheet. I also agree with Hélène about the important role of financial conditions in influencing economic activity. As I see it, financial conditions are a key transmission channel of monetary policy because they affect households’ and firms’ saving and investment plans and thus influence economic activity and the economic outlook. If the response of financial conditions to changes in short-term interest rates were rigid and predictable, then there would be no need to pay such close attention to financial conditions. But, as we all know, the linkage is in fact quite loose and variable. For example, during the mid-2000s, financial conditions failed to tighten even as the Federal Reserve pushed its federal funds rate target up from 1 percent to 5¼ percent.