As a result, market participants face relatively more extreme spikes during a repricing of risk. So we are talking about the abruptness and magnitude of index movements, rather than the movements themselves. B – IMPLICATIONS FOR MONETARY POLICY IMPLEMENTATION Now what is the impact of these changes on monetary policy implementation? Just like asset management, monetary policy is about taking the right decisions.
That’s why it matters a great deal to have a sound grasp of what economic indicators are actually telling us – including financial market indicators. The yield curve has long been used by market participants to gauge markets’ aggregated expectations on the economic outlook. Getting a grip on inflation expectations touches on the core of our price stability mandate.