That being said, the positive but modest underlying momentum of the recovery remains in place. Annual inflation in the euro area is currently 1.8%, and we expect inflation to remain moderate in 2011. Very importantly, we note that inflation expectations over the medium to longer term continue to be firmly anchored in line with our definition of price stability.
The reason probably is that monetary easing was recognized as having a positive effect on inflation expectations and economic activity. Thus, whether the yield curve flattens or steepens when short-term interest rates are raised depends on the economic situation as well as the market's view of monetary policy at the time.