FRANKFURT, Feb 23 (Reuters) - The European Central Bank has bought enough bonds so that it could retreat from further purchases without risking an unwarranted rise in yields, ECB executive board member Benoit Coeure said on Friday.
“In the future, the Eurosystem can retreat as buyer in the market without risking an unwarranted decompression of the term premium,” Coeure told a conference in New York.
“But it can contain volatility and safeguard appropriate financial conditions only to the extent that it provides effective guidance on the expected future path of short-term interest rates,” he added.
Markets expect the ECB to shut its 2.55 trillion euro bond purchase programme by the end of this year after more than three year, taking comfort in the rebound of inflation, even it if could take years before price growth rises back to the bank’s target of almost 2 percent. (Reporting by Balazs Koranyi; Editing by Matthew Mpoke Bigg)