held on the eurosystem balance sheet into the market — likely into repos or short - term government securities. this, in turn, could have created additional demand for highly - rated euro collateral, at a time when some segments of money markets, in particular the market for euro area repo and short - term government securities, are showing signs of collateral scarcity ( chart 2 ). the early indications are that the decision on the remuneration of government deposits has been effective. following the announcement of the change in the remuneration of non - monetary policy deposits, the recent increase in the spread between the yield for short - term euro government securities and interest rate swaps has been partially reversed. ( chart 3 ). at the same time, as the change in the ceiling for the remuneration of governments will only come into effect today, the full effects of the measure may only become visible over time, and we remain attentive to the spread between different money market rates as well as collateral scarcity concerns. the temporary change in the remuneration ceiling for government deposits gives government deposit holders extra time to undertake a smooth and gradual return of their deposits to the market. from the ecb ’ s perspective, it remains the case that encouraging market intermediation of these deposits remains desirable in the long term. in the meantime, the temporary change will allow us to assess the adjustments of money markets across market segments to the return to positive interest rates and thereby also reduce uncertainty about the pass - through of the changes in the ecb interest rates to money markets. chart 3 change in 3 - month bill to ois spread de and fr ( left side ) ; change in 2 - year bond to ois spread de and fr ( right side ) ( percentage ) sources : bloomberg and ecb calculations. notes : the charts display the change in 3 - month bill to overnight indexed swap ( ois ) spread and 2 - year bond to ois spread for germany and france between the july and september governing council meetings ( blue bar ) and the change since the september governing council meeting ( yellow bar ). the latest observations are for 13 september 2022. 1. i am grateful to pamina karl for her contribution to this speech. 2. for more general considerations on this new phase of euro area monetary policy, see also lane, p. r. ( 2022 ), “ monetary policy in the euro area : the next phase ”, remarks to the policy panel at the annual

speech monetary policy and the money market opening remarks by philip r. lane, member of the executive board of the ecb, meeting of the money market contact group 14 september 2022 it is a pleasure to open this meeting of the ecb ’ s money market contact group ( mmcg ). [ 1 ] while the money market is always central to the transmission of monetary policy, its role is especially prominent when the set of policy interest rates is the main active monetary policy instrument. after an extended period in which policy rates were stable near the lower bound and asset purchasing was the marginal monetary policy instrument, the money market is now back to centre stage in the transmission of monetary policy and the mmcg is an excellent forum to collect feedback from you, the money market practitioners. in these opening remarks, i will first explain the monetary policy decisions we took last week, before turning to the transmission of our recent interest rate moves in the money market. the september monetary policy decisions the governing council last week decided to raise the three key ecb interest rates by 75 basis points. this major step frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to our two per cent medium - term target. based on our current assessment, we expect that this transition will require us to continue to raise interest rates over the next several meetings. this policy path will dampen demand and guard against the risk of a persistent upward shift in inflation expectations. we will regularly re - evaluate our policy path in light of incoming information and the evolving inflation outlook. our future policy rate decisions will continue to be data - dependent and follow a meeting - by - meeting approach. we took last week ’ s decision, and expect to raise interest rates further, because inflation remains far too high and is likely to stay above our target for an extended period. the new staff projections foresee inflation to average 8. 1 per cent in 2022, 5. 5 per cent in 2023 and 2. 3 per cent in 2024. this is a substantial revision relative to the june staff projections : 2022 inflation has been revised up by 1. 3 percentage points, 2023 inflation by 2. 0 percentage points and 2024 inflation by 0. 2 percentage points. the most important driver of these upward revisions is the exceptional increases in the assumptions for wholesale prices for gas and electricity over the coming months. in addition, faster growth in nominal wages – reflecting some