In the current situation, it is therefore more important than ever that central banks act in time. Their action should be foreseeable, gradual, and data-dependent. This way, debtors can better cope with an increase in interest rates, and accordingly, risk premia are expected to rise to a limited extent. As inflation in the euro area continues to run high, we need to act.
I expect the net purchases under the APP to be discontinued at the end of June. And if both the incoming data and our new projection confirm this view in June, I will advocate a first step normalising ECB interest rates in July.