Is the recent increase in long-term interest rates a threat to the euro-area recovery?

Analiza 04-09-2017

The magnitude of the invrease in long-term rates is still relatively modest and is mainly driven by good news. It does not represent a strong tightening of financial conditions, nor does it endanger public finances. The ECB should monitor the situation carefully but it should not be a major concern for the moment. Nevertheless, if in the future yields drift away from levels compatible with economic fundamentals, or threaten the European recovery and the return of inflation towards 2%, the ECB’s expanded toolbox could be used to influence the whole yield curve.