current level for a long time. finally, the package of measures was supplemented by two further initiatives directly designed to promote lending to firms and households. first, a new longer - term refinancing operations programme, with special characteristics expressly geared to boosting the growth of credit to the private sector, was implemented. these operations, which will begin in september this year and will be repeated quarterly until june 2016, will mature in september 2018. this loan term of up to four years for the first bis central bankers ’ speeches loans requested by banks clearly exceeds the usual time horizons in liquidity management and is much closer to those seen in the extension of credit to the private sector. the cost of funds for banks will be highly competitive because their interest rate has been set at the level for the main refinancing operations ( currently at 0. 15 %, as noted above ) plus a small fixed spread of 10 basis points. the amounts banks may apply for under this programme will be set on the basis, first, of their current level of lending ( strictly credit to the non - financial private sector, excluding that for house purchase ) and, second, of their performance over the coming two years. banks that are more willing to grant credit will have access to a larger volume of funds. to ensure that funds are effectively used for financing the expenses of households and firms, the measure includes a mechanism whereby any banks failing to show lending levels above certain minima ( set on the basis of their track record in the twelve months before the governing council ’ s decision ) will have to return the funds they borrowed from the central bank. the second credit - related measure adopted was to step up the work currently under way to design a programme for the purchase of asset - backed securities. this market was heavily affected by the crisis, and its underdevelopment in europe is constraining the greater diversification of sources of corporate finance, particularly for smes. initiatives such as this may stimulate the deepening of this market, although they are unlikely to be decisive if not accompanied by further action in equally important areas, such as that of regulation. to sum up, the situation of the euro area justifies the differing conduct of its monetary policy which, as i have attempted to explain, is still at the stage of scaling up its expansionary action, in contrast to the likely winding - down of stimuli prevalent in other advanced economies. this adds complexity and uncertainty to the exceptional situation of abundant liquidity and low interest

, housing services ( blue line ), and services excluding housing and energy ( red line ). i look at these three categories separately because what has been causing inflation in each of these sectors is somewhat different. understanding the different causes and how they affect the different components could help the fomc predict the future course of inflation. since the fed ’ s monetary policy report explains why the fed chooses the pce price index to the cpi ( see board of governors, 2000, footnote 1 ). notwithstanding this preference, the fomc relies on a variety of aggregate price measures, as well as other information on prices and costs, in assessing the path of inflation. for an explanation of how the board of governors of the federal reserve system evaluates changes in inflation, see board of governors ( 2016 ). monetary policy affects the economy ( and inflation ) with a lag, the committee is always forward looking. focusing on the price of core goods, the black line in figure 3, you can see how goods prices rose sharply in the second half of 2020 due to both a rapid shift in demand toward goods and unprecedented disruptions to global supply chains. as so many were isolating themselves — especially those of us lucky enough to have jobs that let us work remotely — there was a sharp shift in demand from services ( eating out and traveling ) to durable goods ( like stationary bicycles ) to make our stay - at - home experience more pleasant. the pandemic also severely disrupted the global production and distribution of goods, leading to large backlogs at ports and widespread shortages of materials, most notably semiconductors. the imbalance between supply and demand for goods resulted in a sharp increase of prices. at the end of 2021, once vaccines were developed and deployed and people slowly emerged from isolation, there was a partial shift in demand back to services, and supply chain bottlenecks started to ease. thus, inflation in this category started to come down and has come down substantially. in contrast to core goods, housing services inflation, the blue dashed line in figure 3, has not started to come down yet. housing services prices are estimated using information on rents and measure the price that renters pay, and homeowners would pay, to live in their homes. like core goods, demand in the housing sector underwent a major shift during the pandemic. the surge in work from home shown in figure 4 led to an increase in the demand for bigger homes located in smaller metro areas or further from city