employment costs of bringing down inflation using a policy framework entailing gradualism and flexibility. we remain determined to eradicate the hydra - headed monster of high inflation, without leaving unattended risks to the transmission of our single monetary policy, to financial stability and to economic activity. we have therefore developed an important new tool, the tpi, which will allow us to both respond to inflation aggressively and to thwart any threat of fragmentation. i am confident that, by the end of 2024, the inflation monster will have been defeated.

or a stepby - step approach is appropriate given the surrounding high uncertainty and the supply - side nature of inflation. let me now turn to a very important pledge we have made at the governing council, ever since we first embarked on the gradual process of policy normalization : any resurgent fragmentation risks that would undermine the smooth transmission of the normalisation of our monetary policy across all countries in the euro area must be forcefully confronted. this summer, the governing council acted forcefully on this pledge. in june, it applied flexibility in reinvesting redemptions coming due under the pandemic emergency purchase programme ( pepp ), with a view to maintain the functioning of the monetary policy transmission mechanism. this is a first line of defense to counter risks to the transmission mechanism related to the pandemic. in july, the governing council introduced the transmission protection instrument ( tpi ). the tpi is a very powerful tool that will support the effective transmission of the ecb ’ s single monetary policy across all countries of the euro area as monetary policy is normalised. the euro area has been at the epicenter of strong and successive fragmentation episodes. a major reason for that is in my view that our monetary union is incomplete. in the absence of a complete banking, capital markets and fiscal union, we would have faced a distinct possibility of further fragmentation episodes in the future if we had not adopted the tpi. to conclude, we remain determined at the governing council, to eradicate the hydra - headed monster of high inflation, without leaving unattended risks to the transmission of our single monetary policy, to financial stability and to economic activity. short concluding remarks let me conclude with the following remarks. monetary policy can be a powerful tool to maintain price stability if the shocks hitting the economy are from the demand side. during the past few years, the euro area has been hit by a series of shocks. the governing council has determined that the shocks, especially for the euro area, have predominantly come from the supply side of the economy. like the hydra monster, these supply - side shocks have been multi - headed. we have navigated the rough seas of high inflation with the needle of our compass on our mediumterm objective – an inflation rate of 2 per cent. to help us navigate these rough seas, we have kept a close eye on inflation expectations. throughout the storm, inflation expectations have remained close to our 2 per cent objective. we have formulated policy in such a way that will minimize the output and