ECB's Lane says that "you should believe Banks when they say inflation will return to target"; shock is medium sized and a measured response is appropriate

The phrase that inflation will return to target places the chief economist in the camp that treats the current shock as a demand-and-supply disturbance that policy cannot and should not fully offset, a framing historically associated with tolerance for an above-target overshoot at the horizon rather than with front-loaded tightening. 'Medium sized' shock and a 'measured response' is the vocabulary of gradualism: in past episodes officials using this register have been signaling stepwise moves with explicit pauses, and front-end pricing has tended to reprice on the implied cadence rather than on the destination, since the reaction function, not the terminal rate, is what is being described. The appeal to what banks say about inflation expectations is a credibility argument, leaning on survey and lending-channel evidence that expectations remain anchored, which has typically served as cover for patience when headline prints argue otherwise. The case distinction worth drawing is between a shock that de-anchors medium-term expectations and one that passes through: the former has historically forced a shift in tone from exactly this kind of language, so expectations data and negotiated wage settlements become the tripwires. Follow-ons are whether peers at the hawkish end of the council echo or contradict the framing, and how the language carries into the staff projections at the next meeting, where 'measured' either survives or gets quietly dropped.