ECB Governing Council member Klass Knot said that a “major part” of recent rise in Eurozone treasury yields was due to improvement growth in inflation outlook of the bloc. But still, the rest was an unwarranted response to the surge in US yields.
Hence, “we thought it would be wise to frontload part of our purchases, as a counterweight in the coming months”. Knot referred to ECB’s decision to significantly increase the pace of the pandemic emergency purchase program in Q2.
“But as soon as the improvements that we expect materialise, that reason of course will disappear,” he added.
