By contrast, if the policy authorities’ firm stance toward overcoming inflation would gain credibility, the credible policy stance will lead to a change in firms’ and households’ expectations for future policy path, together with their behavior based on that renewed expectations. Accordingly, inflation will be contained in a self-fulfilling manner.
Following up on the decisions of 2 October 2014, we last month started purchasing covered bonds under our new programme. We will also soon start to purchase asset-backed securities. The programmes will last for at least two years.