Overall, the available evidence suggests that the ECB’s rate forward guidance has been and continues to be an effective monetary policy tool and that the transmission of forward guidance to financial conditions and the economy has remained stable over time.
The PEPP interrupted and reversed this dynamic, thereby safeguarding the financial conditions that are consistent with our primary mandate. But because of the wide uncertainty around the ultimate economic and fiscal effects of this crisis, and the likely substantial additional issuance needed in coming years, yields have not fully reversed and remain above pre-Corona levels.