Paths leading to stronger growth  Ladies and gentlemen, the purpose of the Eurosystem’s highly accommodative monetary policy is to stimulate economic activity in order to bringing inflation into alignment with the definition of price stability. Private consumption in the euro area has been picking up perceptibly, and not just because financing conditions are favourable – low oil prices and inflation are another factor.
Naturally, interest rates faced by the private sector spiked up (particularly for lower-rated debt) as the appetite for risk contracted sharply. https://www.rba.gov.au/speeches/2017/sp-ag-2017-08-09.html  6/16  8/9/2017  Fixed Income Markets and the Economy | Speeches | RBA  Graph 6  The differences between what happened with private sector and government yields can be seen clearly by examining spreads (Graph 7).