ECB's Villeroy Says Half-Point Rate Hike Isn't in Consensus

The video discusses the concept of the neutral rate and its role in managing inflation. It explores the potential for rate hikes by the ECB and their impact on economic activity. The focus is on understanding the balance between inflation control and economic growth, emphasizing the importance of managing market expectations.

In what ways can monetary policy influence economic activity beyond interest rate changes?

What challenges does economic activity face according to the text?