- Rate hike has been well transmitted to money markets
- Appropriate monetary policy should take into account that energy shock remains a dominant force
- Eurozone inflation drivers are different compared to demand-driven overheating dynamics
- Inflation dynamics associated with energy shock component are what we are exposed to
It's a fair point but so long as energy prices are soaring and supply-side issues are yet to return back to pre-pandemic conditions, there is going to be spillovers to core prices and that will in turn keep inflation more embedded in the economy. But I guess Lane is making a point that monetary policy will eventually reach a point where it will follow the path of energy prices in general - not now though.