maximum impact on economic activity in 2023 already, and on inflation only in 2024. in other words, much of the inflation - dampening effect induced by monetary tightening is yet to materialise. but we need it to materialise. and it will only materialise in full if we let it work. against this backdrop, it would be unwise to start cutting interest rates too soon. that would be like switching off the oven before your christmas biscuits are done. once you notice that they are underbaked, you have to heat up the oven all over again and end up using a lot more electricity. now we need to be patient and stay the course to reap the benefits of the tightening in terms of disinflation. key interest rates will therefore have to remain at a high level for a sufficient period. while it is impossible to predict exactly how long this period will be, it is highly improbable that it will end anytime soon. 4 conclusion ladies and gentlemen, at the beginning of my speech, i mentioned that the exact causes of " food coma " are unknown. but rest assured, there is some helpful advice on how to prevent tiredness after a meal. eat less, choose low - carb and low - fat foods, and even engage in some " postprandial perambulation " – that's taking a brief walk after eating, by the way! and there is also some good advice as regards combating high inflation. the best thing is to tighten monetary policy and to not give in – until a timely return to our price stability target is ensured. to avoid the economic damage caused by inflation being too high for too long, we need to restore price stability. as of now, it is too early to declare victory over inflation. in any case, we must not loosen policy until we are absolutely certain of returning to price stability on a lasting basis. that's why " are we there yet? " – the title i gave to my speech here today – is a question i would rather frame in the context of restoring price stability. and my answer to that would be " no ". will we get there? yes. we will. 1 deutsche bundesbank, heterogeneous impact of monetary policy in the euro area?, monthly report, september 2023, pp. 37 - 60. 2 deutsche bundesbank, developments in bank interest rates in germany during the period of monetary policy tightening, monthly report, june

human resources for eldercare. therefore, demand for low - skilled labour in advanced countries is expected to grow. this could result in more upward pressure on wages as well. goodhart and pradhan reasoned at the onset of the pandemic that the surge in inflation that would follow the pandemic would be more than a “ temporary blip ” and would mark “ the dividing line ” between the disinflationary forces of the last decades and the new regime. 5 up to now, there is no clear evidence to suggest that their conclusion is wrong. the economic impact of the russian invasion of ukraine is in part similar to that of the pandemic. looking at the international supply chains, we are again experiencing a massive supply shock, which might reinforce the tendencies sparked by the pandemic. furthermore, both shocks – the pandemic and the war in ukraine – are fostering deglobalisation tendencies and therefore directly undermining one of the major forces that goodhart and pradhan see behind the disinflationary pressure of the past. the uk weekly newspaper the economist recently called the war in ukraine “ the third big blow to globalisation in a decade ”. the first setback was former president donald trump ’ s trade wars. the second was the coronavirus pandemic, which briefly saw cross - border flows of capital, goods and people dry up almost completely. 5 the economist estimates that a retreat by the west to cold - war spheres of influence would be equivalent to writing off us $ 3 trillion of investment and thus lead to less efficient production, hurt living standards, and heat up inflation. history has taught us that turnarounds in inflation tendencies commonly occur when the authorities and economists are either not seeing the risks or denying them. a good example of this is the meeting of the federal open market committee in washington on 15 december 1964. the minutes from that meeting contain a series of interesting passages. one section reads : “ so far, the supply of labor has been adequate to meet expanding demands without any strong general upward pressure on prices. ” and another notable section states : “ with prices of industrial materials increasing little [... ] prices of finished goods have not been subject to pervasive upward cost pressures. ” 6 to sum up : inflation did not seem to be a problem. it was around that time that the great inflation era began, and it was to last for the next 17 years. this period led economists to re