As long as inflation is not a real threat in the euro zone, the ECB will keep its monetary policy highly expansionary

The ECB may adopt two very different behaviours: As long as inflation is not a real threat (expected inflation falls sufficiently rapidly back below the inflation target) and as the ECB is apparently not very concerned about asset prices (real estate prices in particular), monetary policy in the euro zone will remain highly expansionary (to ensure public debt sustainability, boost investment and support the energy transition); But if inflation does become a threat again, the ECB would be forced by its statutes to switch to a significantly more restrictive monetary policy. Under the ECB’s new practice, inflation must be around 2% on average; a threat would therefore be inflation remaining persistently above 2.5%, for example. What is said about the ECB therefore now depends crucially on the forecast for inflation in the euro zone in 2023 and on the trend in the determinants of inflation (labour supply and wages, bottlenecks and commodity prices, productivity).