of 2. 9 % and a core rate of 4. 2 % in october 2023, inflation is still too high. the governing council is committed to bringing inflation back to our 2 % medium - term target in a timely manner. based on our current assessment, we consider that key ecb interest rates are at levels that will make a substantial contribution to achieving this goal. provided they are held at these levels for a sufficient period of time. our future decisions will continue to be based on our assessment of the medium - term inflation outlook in light of the incoming data, the dynamics of underlying inflation, and our assessment regarding the strength of monetary policy transmission. as regards the inflation outlook and the dynamics of underlying inflation, the september staff projections do not see inflation rates returning to about 2 % before late 2025. but those numbers were published before the terrible events in the middle east. the associated geopolitical tensions make the medium - term outlook more uncertain. incoming data and the december projections will provide important information for our decision - making at the next governing council meeting. 3 the transmission of the recent policy tightening as regards the strength of monetary policy transmission, a handful of indicators cannot paint the full picture. in the following, i will share my view on how the interest rate hikes are currently being digested, and whether fears of overtightening might be justified. monetary policy transmission is a complex process, with a whole host of " channels " at play, including the exchange rate channel, the inflation expectation channel and the credit channel. transmission is also characterised by variable and uncertain time lags. quite how monetary policy actions impact on the economy and the price level is always difficult to predict. and, given the highly uncertain external environment, the unprecedented monetary policy tightening, and possible changes in the behaviour of firms and consumers in the context of high inflation, it may be even more difficult at present. moreover, structural differences across euro area economies mean that the single monetary policy does not have the same effect on prices or output everywhere. rather, the impact differs from one country to the next. in germany, for example, interest rate changes have a stronger effect on real gdp than they do in spain, say, as recent bundesbank research has shown. 1 2 / 6 bis - central bankers'speeches this could be the result of the more prominent role of interest rate - sensitive sectors in germany, a more flexible labour market, a stronger focus on exports, or greater competition in the banking system. by

maximum impact on economic activity in 2023 already, and on inflation only in 2024. in other words, much of the inflation - dampening effect induced by monetary tightening is yet to materialise. but we need it to materialise. and it will only materialise in full if we let it work. against this backdrop, it would be unwise to start cutting interest rates too soon. that would be like switching off the oven before your christmas biscuits are done. once you notice that they are underbaked, you have to heat up the oven all over again and end up using a lot more electricity. now we need to be patient and stay the course to reap the benefits of the tightening in terms of disinflation. key interest rates will therefore have to remain at a high level for a sufficient period. while it is impossible to predict exactly how long this period will be, it is highly improbable that it will end anytime soon. 4 conclusion ladies and gentlemen, at the beginning of my speech, i mentioned that the exact causes of " food coma " are unknown. but rest assured, there is some helpful advice on how to prevent tiredness after a meal. eat less, choose low - carb and low - fat foods, and even engage in some " postprandial perambulation " – that's taking a brief walk after eating, by the way! and there is also some good advice as regards combating high inflation. the best thing is to tighten monetary policy and to not give in – until a timely return to our price stability target is ensured. to avoid the economic damage caused by inflation being too high for too long, we need to restore price stability. as of now, it is too early to declare victory over inflation. in any case, we must not loosen policy until we are absolutely certain of returning to price stability on a lasting basis. that's why " are we there yet? " – the title i gave to my speech here today – is a question i would rather frame in the context of restoring price stability. and my answer to that would be " no ". will we get there? yes. we will. 1 deutsche bundesbank, heterogeneous impact of monetary policy in the euro area?, monthly report, september 2023, pp. 37 - 60. 2 deutsche bundesbank, developments in bank interest rates in germany during the period of monetary policy tightening, monthly report, june