aim to prevent cliff effects, it very much depends on the inflation outlook whether we will need a durably higher purchase pace. if this outlook changes, i think the asset purchase program, the app, is our appropriate instrument of marginal policy adjustment. we should thus maintain the policy optionality to adjust our purchase pace in either direction, if needed. 7 a second challenge is that, when we transition from the pepp to the app, we will likely lose some of the flexibility that was embedded within pepp. this flexibility has served us well in countering risks to the monetary policy transmission mechanism caused by the pandemic. pepp has therefore been designed in such a way that purchases can be conducted in a flexible way over time, across asset classes and among euro area countries. when we transition out of pepp, we will need to assess whether maintaining this type of flexibility is proportional and, if so, how it can best be achieved. i think i stop here and hand it over to you, axel. 2 / 2 bis central bankers'speeches

241 - 251. it is not possible to trace the part of equity extraction that initially purchases certificates of deposit, stocks, bonds, and other assets but is later liquidated to finance personal consumption expenditures. survey data usually request the disposition of loan proceeds over a limited period of about a year. we make the assumption that the shares of the loan proceeds are fixed over the past decade. 2 / 5 however, a significantly different approach to separating the proportion of consumer spending financed out of income from that financed out of wealth, though one that is similarly robust, concludes that the decline in the saving rate over the past decade can be explained by the decline in interest rates and by the increase in overall household wealth. that wealth, however, includes nonhousing wealth, most importantly stock market wealth. thus, we have two approaches, both of which would seem capable of explaining much or all of the decline in the personal saving rate. of course, both cannot be true, for if they were, we would have explained a greater drop in personal saving than actually occurred. obviously, this issue will remain an area of active research interest. nonetheless, it is difficult to dismiss the conclusion that a significant amount of consumption is driven by capital gains on some combination of both stocks and residences, with the latter being financed predominantly by home equity extraction. if so, leaving aside the effect of equity prices on consumption, should mortgage interest rates rise or home affordability be further stretched, home turnover and mortgage refinancing cash - outs would decline as would equity extraction and, presumably, consumption expenditure growth. the personal saving rate, accordingly, would rise. carrying the hypothesis further, imports of consumer goods would surely decline as would those imported intermediate products that support them. and one would assume that the u. s. trade and current account deficits would shrink as well, all else being equal. how significant and disruptive such adjustments turn out to be is an open question. nonetheless, as i have pointed out in previous commentary, their economic effect will, to a large extent, depend on the flexibility inherent in our economy. in a highly flexible economy, such as the united states, shocks should be largely absorbed by changes in prices, interest rates, and exchange rates, rather than by wrenching declines in output and employment, a more likely outcome in a less flexible economy. * * * to judge the size of a hypothetical decline in home turnover and cash - outs, we need to examine more closely the composition of sales of homes