been very low for more than a decade, and they are still lower than they were before the global financial crisis. the ecb has not been alone in how it has acted. some central banks started to normalise their monetary policy even earlier, and the exit from the highly accommodative monetary policy has been swifter than was expected. headline inflation started to come down towards the end of last year, mainly thanks to a decline in energy prices, and it fell to 8. 5 % in january. more worrying however is that 5 / 8 bis - central bankers'speeches core inflation has remained persistently high at more than 5 %, as the underlying price pressures are not yet receding. the ecb governing council consequently announced last month that it will continue to raise interest rates and keep them high enough to bring inflation back to its target of two per cent in the medium term. we also indicated that we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in march. it is most likely this will not be the last rate rise in this cycle, and it is quite possible that interest rates will need to stay high for quite some time so that we can be sure that inflation will come back to, and remain at, close to two per cent. central banks need to focus on second round effects from inflation, and prevent large but temporary price surges, like those we have seen in very volatile energy and food prices, passing through into other prices, labour costs and inflation expectations. if they do, they could cause a wage - price spiral, which would then stop inflation from falling back to its medium - term target level after the temporary shocks have faded. the interaction of monetary, fiscal and structural policies high inflation is clearly a challenge not only for people, companies and central banks, but also for governments. europe has recently witnessed significant turmoil in energy markets and governments have tried to find ways to provide relief to households and companies either by direct subsidies or through new regulations in the energy markets. but even before the russian invasion of ukraine, it was expected that the green transition would push energy prices up. the signal given by that rise in energy prices was intended to have an important role in encouraging the green transition. the problem now is that not only are energy prices being steered by the green transition, but they have also moved much more sharply because of the extreme tension in geopolitics. we should distinguish between two features of the current problem. the first is

- 1990s, when the inflation - targeting regime was relatively new, lars e. o. svensson, who was then scientific adviser to the riksbank and later a member of the executive board, argued that the debate often lacked structure. at the swedish economics associations ’ proceedings in february 1996 he called for each debater to answer the following questions explicitly or implicitly : ( i ) do you apply the same inflation target as the riksbank, or another inflation target, or any other target? ( ii ) do you make the same forecast as the riksbank or do you make a different assessment? ( iii ) do you know of a better way of attaining the target? 13 these questions appear as relevant today as they were twenty years ago. secondly, i have discussed how one should view a situation where it takes longer for inflation to attain the target, despite the riksbank doing everything it can to avoid this happening. this is not a situation we expect to find ourselves in, but there is nevertheless reason to seriously consider and examine it. if such a situation were to arise, it would very important to clearly communicate that the inflation target has not been abandoned, to prevent long - term inflation expectations from falling excessively. as the central bank determines inflation in the long run – inflation is a monetary phenomenon – there are also good reasons for expectations of long - term inflation to remain in line with the target. this is important to maintain a smoothly - functioning price - setting and wage formation, but also for monetary policy to be able to counteract future economic downturns. communicating this is a difficult but hopefully not impossible task. references alsterlind, jan, armelius, hanna, forsman, david, jonsson, bjorn and wretman, annalena ( 2015 ), ” how far can the repo rate be cut? ”, economic commentary, no. 11, sveriges riksbank. ball, laurence m. ( 2014 ), “ the case for a long - run inflation target of four percent, ” imf working paper, wp / 14 / 92, international monetary fund. 13 ekonomisk debatt ( 1996 ). 12 bernanke, ben s. ( 2016 ), “ modifying the fed ’ s policy framework : does a higher inflation target beat negative interest rates? ”, blog post, brookings, 13 september. blanchard, olivier, dell ’ ariccia, giovanni and mauro, paolo ( 2010