Third, we intend to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when we start raising our key policy rates. Again, the notion of an “extended period” is kept open to leave sufficient optionality in order to be able to respond to changes in the inflation outlook.
In principle, this sequence is not very different from the one adapted by many other central banks, including the Bank of England and the Federal Reserve. It defines a clear succession of steps that leaves sufficient flexibility to adjust the length of time needed before activating the next step of the sequence.