food by 1. 0 %. a second cause can be attributed to the strong rebound of energy prices, in particular oil and natural gas, the latter having also a direct impact on wholesale electricity prices. it is of course very hard to forecast prices, but futures markets for natural gas are currently pricing a sharp decrease in the second quarter of 2022, once the current high demand related to stock replenishment and the winter season is over. a third cause is the global shift from the consumption of services to the consumption of goods as the global economy reopened while health restrictions or behavioural changes still affect the service sector. with low inventories, severe supply bottlenecks in some key sectors such as shipping or semi - conductors, and shortages, supply - chains are struggling to serve this demand. the resulting increase in the price of raw materials and industrial inputs has been transmitted to manufactured goods prices. our central view is that the third cause will fade out over the coming quarters, but the exact timing is uncertain. some prices, such as those of timber and ferrous metals, have already passed their peak and are falling sharply. but as tensions remain acute in shipping and semi - conductors, we cannot rule out that supply - side bottlenecks will push out the date at which inflation starts to come back to its trend. at the same time, we see few signs of general wage increases, in line with subdued services inflation. moderate wage increases in the euro area, in some sectors of the economy, would certainly be warranted to make jobs more attractive and reduce labour shortages. but there are few signs of a wage - price spiral at the current juncture. indicators of long - term inflation expectations of professionals, both market - based and survey - based, have picked up but remain below our 2 % target. according to the ecb staff's latest macroeconomic projections, euro area inflation would decrease to 1. 5 % in 2023. some may question the latter figure and call it too conservative. let me take a practical approach here. there might be some upside risks by a few decimal points on our 2023 forecasts, but what matters for monetary policy is the distance of realized inflation from our target of 2 %. from this point of view, it is clear that the risk remains that we fall short of our inflation target in 2023 rather than exceed it. this calls for a continued accommodative monetary 2 / 5 bis central bankers'speeches policy. but we are carefully

##ate normalization and tightening to be sure, r * is unobservable and its estimation remains surrounded by uncertainty. but i believe it remains a helpful concept in the current normalization. page 7 sur 8 according to me, for the euro area, until we are around r *, the neutral rate — which possibly lies between 1 and 2 % in nominal terms — the road ahead is clear and we can go in a sustained and determined way, including through some guidance. doing so is normalization, lifting our foot from the accelerator pedal. in my view, we could be there before the end of the year, after another significant step in september. only beyond r * could tightening — actively pushing the brakes — begin ; we will then have to discuss and decide, based on our assessment of actual inflation and the future outlook, focusing in particular on its core part and on wage developments. the us is obviously closer to tightening due to several differences in the nature of inflation there. but have no doubt that we at the ecb would if needed raise rates further beyond normalization : bringing inflation back to 2 % is our responsibility ; our will and our capacity to deliver on our mandate are unconditional. iii. how to remunerate massive excess liquidity when it coexists with positive rates? let me come to another issue that we practitioners must now confront : how to remunerate massive excess liquidity when it coexists with positive interest rates? this will be a new situation for most of us, and especially for the euro area. while excess liquidity was negligible until 2008, it currently stands at more than €4 trillion, as a legacy of our app and pepp assets purchase programs, but also, for one third, our tltros. yet, our reserve remuneration system was designed at a time of negligible excess liquidity. the system already showed its limits in the past, when having to coexist with negative interest rates. left unchanged — without our tiering system — it would have severely impaired the bank channel in the transmission of our monetary policy. the return of policy rates to positive territory would this time provide a sizeable risk free income to the banking system, and a similar loss for the eurosystem. the possible losses for central banks and the eurosystem may draw public attention, but the primary objective of monetary policy is price stability, not central bank profitability ; and the more relevant issue page 8 sur 8 in