inflation targeting economic uncertainty

European Central Bank: Inflation Tolerance and the Last Mile

The European Central Bank (ECB) targets an inflation rate of 2 percent for economic stability, but increasing uncertainty has sparked a debate on adopting an “inflation tolerance” strategy with a range of acceptable rates. ECB’s executive board member, Isabel Schnabel, likened finetuning monetary policy to completing the “last mile” in sports, emphasizing the challenge in achieving the optimal economic balance.