The beginning of a long quest

Editorial The ECB has changed its operational framework: no rate hikes until medium-term inflation forecasts converge at 2% durably . A patient, even structurally dovish approach will therefore follow, seeking at all costs to avoid over-hasty tightening. In particular, the forecasts for 2024 remain significantly below the activation threshold and perpetuate asset purchases as the main tool for transmitting monetary policy. The ECB’s quest could be plagued by a number of pitfalls: uncertainties about the reaction function, possible disagreements within the Council in the event of a rise in inflation and difficulty of remaining independent from markets and governments. And a major risk: what can be done if current tools do not make it possible to reach the famous 2%? Let’s hope the ECB is not chasing a mirage.