There is also much debate about whether GSE activities more generally lower the cost of mortgage credit, with estimates of the GSEs’ overall effect on fixed-rate mortgages ranging from zero to around 25 basis points (see Ambrose, LaCour-Little, and Sanders, 2004; Geradi, Rosen, and Willen, 2006; Passmore, Sherlund, and Burgess, 2005; and Passmore, Burgess, Hancock, Lehnert, and Sherlund, 2006).
Over the past years, the underlying strength of monetary and credit expansion in the euro area has created upside risks to price stability that appear to have become manifest as inflation has trended upwards. This confirms ex post the prominent role our strategy assigns to money.