That intention was hard-wired in the conditionality – or, in academic parlance, the “policy rule” – that governed the forward guidance on the evolution of the APP from its inception. The programme was to continue at a pre-set monthly pace of purchases until the Governing Council saw inflation on a sustained adjustment path towards levels below, but close to, 2% over the medium term.
We’ve come a very long way since the APP was launched. Last December, we took a first step on the path towards “normalisation” by completing the rotation of instruments from a configuration relying on the pace and horizon of monthly bond purchases to one founded on forward guidance on our policy interest rates as the principal instrument of monetary policy.