are to the upside. that said, we continue to observe that longer - term inflation expectations remain well anchored. i do not think we have evidence of inflation pressures persisting beyond the near term. over the longer term i see price stability being maintained in line with our mandate. this hump in inflation is largely due to the food and energy price pick - up that we have seen and that has become worse in recent months. however, at the moment, we have no reason to believe this would be more persistent. the growth situation maybe a little bit trickier to analyse. the events in japan and the continuing events in the middle east and north africa could be interpreted as a downside risk on growth. at the same time, we see continued evidence of rather robust growth in some parts of the euro area, so i would not say that the overall growth outlook has shifted downwards despite the negative events i mentioned earlier. the risks may be to the downside, but my baseline scenario has not shifted. bis central bankers ’ speeches q. how would you describe the monetary policy stance. is it appropriate now? when it comes to interest rates, i would say that monetary policy is accommodative. in my view, it is appropriately accommodative. it is appropriately accommodative in the sense that we still have some way to go towards repairing the damage that has been experienced as a result of the crisis we have been living through during the past three years. q. does that mean that you don ’ t see interest rates going up for, say, over the next three months? as you know, the governing council of the ecb never pre - commits on interest rate policy decisions. and personally i believe that it ’ s not useful to try to forecast the evolution of policy rates. what is more important is to monitor the evolution of the real economy and try to continuously monitor and form an assessment of the inflation risks. if the evolution of the economy over the next few months is such that there are greater upside risks to inflation, i believe that would justify removing some of the accommodation that is currently in place. if, on the other hand, some of the more negative scenarios with respect to the economy materialise and we see inflation risks abating, then that would not be the appropriate reaction. q. could you phase out more non - standard measures soon? as the liquidity needs of the banking system become less pressing and as the transmission mechanism of monetary policy

can be confident that they know the answers. what we do know so far is that there has been a sharp downwards inventory correction and a contraction of investment notably in ict which was so buoyant before, with associated declines in equity prices and in us imports. consumption growth, supported by a strong housing market has so far held up rather better than might have been expected. looking forward, on the positive side, one could point to the strong monetary policy response to the slowdown, and to the recent tax rebate, which have yet to have their full effect. there were some suggestions in recent capital goods orders figures that the rate of decline in investment spending may now slow. and the rate of inventory liquidation had stabilised pointing to a turn at some point so long as consumption continued to be reasonably well sustained. consensus opinion, or so it seemed to me, had become modestly optimistic. at least that was the prospect until tuesday and the appalling terrorist attacks in new york and washington. the immediate impact of those events was a sharp fall in already weak equity prices worldwide, and fears that the trauma would undermine confidence - including consumer confidence in the us, already vulnerable to rising unemployment. even before the terrorist attacks, the pessimist could point to the imbalances within the us economy, including the weakness of private sector savings, the overhang of past investment excesses, and the us external deficit, which would, at some point, need to be corrected. on that view one could envisage a gradual adjustment over time in which case the us might face a protracted period of nearstagnation ; or - if you were really pessimistic - the adjustments might be more abrupt, implying a period of negative growth and possible further financial instability. the tragic events on tuesday will have encouraged such pessimism. for what it is worth, while i recognise the downside risks, i remain - perhaps stubbornly - cautiously optimistic. on the immediate situation, i was immensely impressed that the federal reserve and other us agencies have been able to keep essential payments and settlements services functioning as they have, which has allowed markets internationally to continue to function. and i was encouraged that equity markets in europe yesterday recovered some of their immediate losses. of course it is much too soon to assess the lasting impact of the events of the past two days. but the fundamental forces affecting the us economy have not changed. and in terms of confidence effects, it would be a mistake to underestimate