"Monetary policy is already exceptionally accommodative, and further Gilt purchases could contribute to an unwarranted narrowing in risk premia and complicate the transition to a more normal monetary stance at some point in the future," the June 19 minutes showed.
"If I were to single out what for me would be the biggest risk to global financial stability right now, it would be a disorderly reversion in government bond yields globally. We've seen shades of that over the last two to three weeks. We have intentionally blown the biggest government bond bubble in history. We've been vigilant to the consequences of that bubble deflating more quickly than we might otherwise have wanted. That's a risk we need to be very vigilant to."
"While there would always be uncertainty over the correct level of interest rates, it is not normal that official interest rates should be near zero, and that markets should be effectively penalizing investors for holding longer-term debt. Yields will go up, as the economic recovery takes hold, but the ride to normality will almost surely be bumpy, with yields going through both calm and volatile periods, as markets price in sometimes conflicting news."