ECB's Lane: Much of the ultimate inflation impact of our measures is still in the pipeline

• Has open mind about the precise scale of the monetary policy tightening that will be needed.
• Calibration of the monetary policy stance needs to be regularly reviewed in line with the incoming information
• Says ECB will have data-dependent, meeting-by-meeting approach to setting interest rates
• monetary policy poses two-sided risks to the delivery of our medium-term inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term target
• It is fully priced (in line with our expressed policy intentions) that the main policy rate (the DFR) will reach 300 basis points in March, and it is priced to rise even higher subsequently
• If the increasing role of intangible assets for firm revenues turns out to be a persistent trend, it could support higher interest rate sensitivity, since an increasing role of intangible assets means equity valuations may turn out more sensitive to interest rate changes than in the past

Full speech here.

It's a long speech but two things stand out for me, one is that eurozone household will be largely immune from hikes via the mortgage channel with nearly 80% either renting or owning their homes outright. Just 8.1% are on adjustable rate mortgages.

Secondly, the consumer is still flush with pandemic savings with very little drawdown Drawdown In financial trading, the drawdown represents the amount of money a trader can lose or has lost, following a series of losing trades. This is measured from the high of the trader’s capital to its low, over a given period of time. This is usually expressed as a percentage of a trader’s account. The current drawdown is simply the amount of money a trader’s balance has been reduced by in a given time, without necessarily closing out at that point.For example, if a trader placed an initial deposit o In financial trading, the drawdown represents the amount of money a trader can lose or has lost, following a series of losing trades. This is measured from the high of the trader’s capital to its low, over a given period of time. This is usually expressed as a percentage of a trader’s account. The current drawdown is simply the amount of money a trader’s balance has been reduced by in a given time, without necessarily closing out at that point.For example, if a trader placed an initial deposit o Read this Term as of the end of Q3.

Lane noted that this will act as a buffer for consumption but noted that a large share of it accrued to the wealthiest households and that much of the money that went to low income households could be swallowed up by food and energy costs.

Overall, there are some interesting observations on the nature of the eurozone economy here but nearly nothing to signal what's coming next in monetary policy.