In her opening remarks in Sintra, Christine Lagarde reminded the audience that the conduct of monetary policy now takes place in a more volatile and less predictable environment, characterised by a larger number of and more diverse economic shocks. Faced with this uncertainty, the ECB president advocated for a communication style she referred to as “framework guidance”: an approach centred around scenarios and less prescriptive regarding the future rate paths compared to traditional “forward guidance”. This aligns with the new monetary policy strategy the ECB introduced exactly one year ago in Sintra[1]. The strategy ... (full story)