ECB's Lagarde Says 2% Inflation Target Is 'Not a Ceiling'

ECB's Lagarde Says 2% Inflation Target Is 'Not a Ceiling'

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The ECB has adopted a new monetary policy strategy, aiming for a 2% inflation target over the medium term. This replaces the previous target of below, but close to 2%, removing ambiguity and clarifying that 2% is not a ceiling. The strategy also explicitly considers climate change and the carbon transition. The ECB believes this approach is clearer, simpler to communicate, and well-balanced.

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2 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

What does the Governing Council convey about the 2% inflation target?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

Why is the 2% inflation target considered clearer and simpler to communicate?

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