There is considerable evidence that these purchases have eased financial conditions, and so have presumably increased interestsensitive spending.24 Research suggests that our purchases of mortgage-backed securities pushed down MBS yields and that MBS yields pass through, with a lag, to mortgage rates.25 Indeed, I see the recent strength in housing and consumer durables, such as motor vehicle purchases, as partly reflecting the effect of reduced borrowing costs.
At the end of the day, it could become more and more difficult for the European Central Bank to focus on its promise of a stable currency. 4 Central bank independence in a democracy Ladies and gentlemen, From the vantage point of politics, the central bank as “crisis response unit” has clear advantages. First, central banks allegedly have powerful tools and deep pockets.