Quarterly assessment of the ECB's monetary policy stance

The paper seeks to assess the current monetary policy stance of the European Central Bank (ECB). To do so, it analyses factors driving the inflation dynamics in the euro area (EA) and their potential persistence, drawing comparisons with the inflation drivers and policy response in the United States (US). Given the prominent role played by the energy-price increase in EA inflation and the differential exposure of EA Member States, the paper analyses the country-level inflation dynamics in response to the energy shock. Finally, the paper discusses the ECB's strategy and communication, and the interpretation drawn by financial markets, before taking stock on the stance of monetary policy.