where is monetary policy headed? virtual keynote speech at the frankfurt euro finance summit 04. 07. 2022 | virtual | joachim nagel 1 introductory remarks 2 inflation 3 need for monetary policy action 3. 1 how far will key ecb interest rates rise? 3. 2 do we need an anti - fragmentation instrument? 1 introductory remarks ladies and gentlemen, i would like to extend my warmest welcome to all of you here in attendance at the frankfurt euro finance summit. i wish i could have been there with you today at the frankfurter hof. especially since i know that we have all sorely missed seeing each other in person at events like this. however, for today, chancellor scholz invited me to come to berlin for the opening event of konzertierte aktion. i therefore trust you will understand that i am only able to speak to you via video today. konzertierte aktion focuses on the high rates of inflation and the question of what policymakers and social partners can do to combat it. in this context, i believe my role is to contribute the bundesbank ’ s analytical expertise to the discussion. exchange and dialogue between policymakers and social partners can be beneficial. however, it is also clear that the responsibility for safeguarding price stability lies foremost with the independent eurosystem. the eurosystem is responsible for monetary policy and tasked with safeguarding price stability in the euro area as a whole. and it is precisely this topic that i would like to discuss today : where is monetary policy headed, and what is it doing to bring the high rates of inflation back under control? 2 inflation ladies and gentlemen, just a few days ago, the eurosystem ended its net purchases under the asset purchase programme. the ecb governing council very clearly set out the prospect of multiple key interest rate hikes. the first rise in interest rates will likely be decided at the next monetary policy meeting on 21 july. many consider this to be long overdue in light of the high rates of inflation. to use a house as a metaphor, monetary policy is coming out of the basement and making its way back upstairs. it is now taking the first step on the staircase of interest rates. monetary policy is being pushed to act, above all, by the medium - term inflation outlook. however, the current inflation rates are cause for concern, too. over the past few months, consumer price inflation has repeatedly reached new highs since the introduction of the single currency. and

##ization of finance. the bundesbank has put this topic on the agenda of the g20 during germany ’ s presidency last year. one important aspect of this issue we weren ’ t able to look at in the framework of the g20 is the possibilities and risks that come with the issuance of digital tokens or even digital central bank money. the question whether new technology changes fundamentally the foundations of central banking is increasingly discussed amongst central bankers. agustin, your talk today is highly welcomed because it will contribute to an objectification of the debate and will constitute an important input for our policy deliberations. i am very happy that we were able to attract such a distinguished speaker for this task. fire away. the floor is yours. 1 agustin carstens ( 2013 ). the quest for successful policy responses to sovereign crises. speech at the monetary authority of singapore lecture 2013, 5 february 2013. 2 / 2 bis central bankers'speeches