Furthermore, in the last decades, there has been a global trend for lower real interest rates which is related to secular stagnation resulting from a continuous deceleration of total productivity growth and an increase in planned savings. Monetary policy short-term rates are low because of these developments, not the other way around.
At the same time, monetary policy needs to remain accommodative in order to normalise inflation levels close to our objective, thus leading to higher interest rates. Consequently, the ECB monetary policy measures that have been taken since summer last year, including most recently the expanded asset purchase programme (EAPP), not only contribute to maintaining price stability but are also beneficial for financial stability.