However, soon thereafter, market expectations about the likely future evolution of monetary policy worldwide changed abruptly, notably as a consequence of Fed communication about their intention to end its bond-buying programme. And this change of market sentiment introduced heightened volatility in the term structure of money markets rates of the euro area as well, beyond very short maturities.
The sharp swings in the term structure that we observed as a consequence starting in late May threatened to lead to a withdrawal of the monetary accommodation that we had introduced in early May. As a response, the Governing Council decided to clarify its policy orientations going forward, conditional on the outlook for inflation and weak economic activity.