BIS central bankers’ speeches  7  interest rates started rising in other monetary areas. While current expectations are already consistent with persistently low levels of key ECB interest rates, government bond purchases should produce further reductions in yields by dampening their volatility in reaction to news and therefore their risk premia.
We should also not forget that the recent reduction in government bond yields has been the result of increasingly widespread market expectations of a forthcoming ECB programme to purchase such bonds. The announcement of such a programme would therefore be effective by merely validating those expectations and thus preserving the low yield levels.