, i have underlined some of the challenges facing monetary policymakers in the current postpandemic and energy - crisis environment. if we keep an open mind and continue learning the lessons of this new environment, i ’ m confident that we will be able to get our policy right – or if not always right, then at least as little wrong as possible – in the tough times going forward. and research, of course, will have an essential role to play in and contribute to this constantly evolving policy process. with these words, let me wish you a very productive and fruitful conference. thank you for your kind attention. olli rehn ( / en / other - pages / tag - search /? tag = olli rehn ) governor ( / en / other - pages / tag - search /? tag = governor ) speech ( / en / other - pages / tag - search /? tag = speech ) in ation ( / en / other - pages / tag - search /? tag = in ation ) monetary policy ( / en / other - pages / tag - search /? tag = monetary policy )

governor olli rehn : monetary policy and the contemporary dynamics of inflation friday 16 september 2022, 11 : 00 am bank of finland governor olli rehn policy keynote at bof - cepr joint conference ‘ monetary policy in the post - pandemic era ’, 16 september monetary policy and the contemporary dynamics of inflation ladies and gentlemen, dear friends, good morning! on behalf of the bank of finland let me welcome you to this conference on monetary policy in the post - pandemic era, jointly organized by the bank of finland and the centre for economic policy research. our collaboration with the cepr in organizing annual conferences has a long and successful history. we very much appreciate this cooperation and naturally we hope and expect that it will continue for many years to come. we have already heard some excellent talks this morning, and we can look forward to more presentations by leading experts in the field later on, including benjamin moll, sydney ludvigson and martin schneider. it is probably a serious understatement to say that the environment for monetary policy has become much more challenging over the past year. indeed, the need for high quality research that can support monetary policy decisions can scarcely be overstated at this time. little more than a year ago, inflation rates were still low across the globe and the world was re - emerging from the pandemic. the main concern for monetary policy was, as it had been for more than a decade, how to appropriately stimulate the economy in order to return it to a balanced growth path and raise inflation to its target. before the governing council meeting in december 2020, both the interest rate expectation curve and average government bond yield curve were negative for up to 10 years. as the year 2022 began, both the ecb governing council and the markets still had good reasons to assume that oil prices and supply - side bottlenecks that had driven up inflation in the euro area would gradually fade away. in november 2021, euro area inflation had reached 4. 9 %, with 3. 2 % forecast for 2022. towards the end of 2021, the central banks ’ assumption of temporarily elevated inflation was already increasingly being challenged, especially in the united states. this was due to inflation creeping steadily higher and the repeated underestimation of inflation by all central banks. inflation forecasts at that time used the futures prices of oil, gas and other energy and raw materials, but these did not keep up with the widening consequences of russia ’ s war