BIS central bankers’ speeches  3  Second, large-scale asset purchases tend to lower the interest rates on the purchased assets, and on other types of debt of similar duration, which in effect flattens the yield curve, bringing longer-term interest rates down closer to short-term interest rates.
As with forward guidance, this can enhance the impact of lower policy rates by spreading the effect to a wider range of borrowers, thereby boosting economic growth. At the same time, higher asset prices can create a “wealth effect,” which can also boost spending and confidence.