After a year of work, the Council of the Manager of the European Central Bank (ECB) updated and examined the strategy of the monetary policy, without changing the comma of the previous one, but strengthened the message about the need to act with force to interrupt inflation with possible descending and ascending deviations. “Our asymmetric 2% strategy was successful, despite all the problems,” said the President of the Central Bank Christine Lagarde. The institution supports 2% asymmetric to achieve the goal and all the tools that it has at your disposal.
In his speech at the Sentra (Portugal) forum, Lagarde called this strategy “evolution, not a revolution,” because “key pillars worked” and, thanks to it, “inflation is in a good place.” Therefore, according to him, there was no need to make big adjustments.
The president of the institution recalled that Covid and Ukraine of the war were two unforeseen unforeseen shocks, but the situation can be controlled by “an increase in historically high types made at an unprecedented speed.” According to the strategy, “Act as quickly as possible” is the key to “avoiding inflation”The field and he emphasized the importance of action as quickly as possible, because “companies can currently correctly correct prices”, which accelerates the transfer process to the economy.
Revised strategy
After a review of the strategy made in 2020-21. The Council of Managers announced that it would periodically evaluate the suitability of its strategy of monetary policyThe field “Assessment published today fulfills this obligation, guaranteeing that our frame, tools and approach remain adequate for its purpose,” the ECB statement said.
The strategy of monetary policy allows the leading advice to effectively respond to important changes in the inflation environment. This is especially important Since the current structural changes, such as geopolitical and economic fragmentation, the growing use of artificial intelligence, demographic changes and the threat of environmental stabilityThey suggest that the inflation environment will still be uncertain and potentially more variable, with a large deviation of 2%symmetrical target inflation.
In the update published on Monday, The ECB confirms its symmetrical goal of inflation of 2% in the medium term and indicates that all its current tools will remain affordable, and its choice, design And the application will allow a flexible response to new violations.
In order to maintain symmetry of the goal, the ECB considers it important to take measures of monetary policy “adequately energy or persistent in response to wide and stable deviations of inflation in relation to the goal in any direction”, which will help prevent inflation expectations and develop inflationary deviations from the lens.
In this sense, The analysis of the ECB warns that in the case of significant disinflation shocks, it is necessary to take into account the lower effective limit of nominal interest ratesS, while in the case of significant inflationary violations, possible non -linearies should be taken into account in fixing prices and wages.
The Institute emphasizes that the strategy of monetary policy allows the leading council to effectively respond to important changes in the inflation environment and emphasizes its importance for modern structural transformations, such as geopolitical and economic fragmentation, growing the use of AI, a change in the population and threats to sustainability of the environment, which suggests that inflation will continue to be uncertain and, possibly, more appropriate, more appropriate, more appropriate, more appropriate, more appropriate. With greater deviation, as part of worship.
“I am glad to report that the management council approved at the last meeting of the updated strategy of the Credit Policy of the ECB,” said Christina Lagard, the President of the ECB, so that the first meeting of the monetary policy of the Administrative Council, in which this renewed strategy will be applied, will be held on July 23 and 24, 2025.
“This assessment gave us a valuable opportunity to critically analyze our way of thinking, to consider our set of tools of monetary policy and adjust our strategy,” said French, for which he provides the institution with an even more reliable basis for the management of monetary policy and fulfill the mandate of price stability in a growing indefinite environment.
