remain strong for the rest of the year. this contrasts with inflation developments in the united states – the first topic chosen for today's hearing – where food inflation has been more contained, while core inflation picked up faster after the pandemic. inflation excluding energy and food has continued to moderate. it fell to 4. 2 % in october owing to declines in both goods and services inflation. most other measures of underlying inflation have also come down. at the same time, the ecb's indicator of domestic inflation – which excludes items with a high import content – has not come down by much, reflecting the fact that inflation is now driven more by domestic sources than by external sources. wage pressures, meanwhile, remain strong. our current assessment is that this mainly reflects " catch - up " effects related to past inflation rather than a self - fulfilling dynamic. and we expect wages to continue to be a key factor driving domestic inflation. at the same time, the contribution of profits – which accounted for much of the strong domestic price pressures seen recently – is now weakening. looking ahead, we expect the weakening of inflationary pressures to continue, even though headline inflation may rise again slightly in the coming months, mainly owing to some base effects. however, the medium - term outlook for inflation remains surrounded by considerable uncertainty. the ecb's monetary policy turning to monetary policy, we remain determined to ensure the timely return of inflation to our 2 % medium - term target. in october we decided to keep the key ecb interest rates unchanged, and we expect that maintaining interest rates at current levels for a sufficiently long duration will make a substantial contribution to restoring price stability. our future decisions will ensure that policy rates are set at sufficiently restrictive levels for as long as necessary. the appropriate level and duration of restriction will continue to be determined in a data - dependent manner, assessing the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. the governing council will reassess its monetary policy stance in mid - december, informed by new data and updated projections, including for 2026. climate change considerations in monetary policy let me now turn to the other topic you have selected for today's hearing – climate change in monetary policy implementation. climate - related disasters are becoming more frequent and more severe. this year's catastrophic floods in slovenia, italy, greece and france are a stark reminder of this. 2 / 4 bis - central bankers'speeches at the same time, the warming of our

sabine lautenschlager : monetary policy – what's next? statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at the eurofi financial forum, tallinn, 15 september 2017. * * * monetary policy has changed significantly since the financial crisis. for many years we have pursued a highly expansionary monetary policy stance. during that time, monetary policy has also become quite unconventional ; we have deployed a range of different non - standard measures. but now, markets, banks and savers are waiting for it to become more conventional again. and there ’ s no doubt that monetary policy will return to normal. the question is when. that is the first challenge. we need to find the right moment. the conditions are all in place for inflation to reach a stable trend towards our goal : below, but close to, 2 % in the medium term. the conditions for that are all in place. growth has returned to the euro area, and so have jobs. we can look back on 17 quarters of economic growth and an unemployment rate that has fallen from around 12 % to around 9 %. this has given a boost to demand ; people have started spending again. and the recovery is not confined to a few countries ; it has taken hold across the euro area. given all of that, inflation should pick up. and it is picking up, but less quickly than one would expect. so what is holding it back? well, there are a couple of things – oil and commodity prices, for instance. they suppress headline inflation and make it more volatile. and they also affect core inflation. and there is another issue : the headline unemployment rate seems to miss some of the slack in the labour market. so the economy might be a bit further away from full potential than would appear to be the case at first sight. that, of course, holds inflation down. at the same time, a long period of low inflation has an impact on how wages and prices are set. this is particularly problematic when prices and wages are indexed to inflation. this effect should wash out over time, though. in any case, we can conclude that inflation is taking a bit longer than usual to pick up. so some monetary accommodation is still needed to bring inflation back on a stable trend towards our goal. but to a large extent, this accommodation is being provided by the standard monetary policy measures and by the