On the one hand, as I have emphasized, a gradualist approach to monetary policy is likely to be the best way for us to deliver on our mandate at any point in time, taking as given the market’s expectations for Fed behavior.
These operations provide strong financial incentives for banks to maintain their lending to the real economy by offering funding at rates as low as -1% to banks fulfilling their lending thresholds. The attractiveness of these operations was reflected in the large take-up of funds in June and September (see right chart slide 5).