The dispersion of growth rates across both countries and sectors is at its lowest level in two decades, reflecting a convergence of growth rates at higher levels. This is good news for economic growth going forward because recoveries tend to be stronger and more resilient when they are broad-based.
There will therefore continue to be significant bond holdings on the central bank balance sheet – and, accordingly, an expansionary monetary policy stance – for a while longer. To a certain extent, it is like driving a car: by reinvesting, the Eurosystem is keeping its foot on the accelerator. But we are not pressing any harder by making more net purchases.