As long as money and bonds are highly substitutable, tapering has very little impact on long-term interest rates

When long-term interest rates are very low, there is a high degree of substitutability between bonds and money since sovereign bonds are very liquid. This means that for savers, holding money or bonds is almost equivalent. If the central bank reduces its bond purchases (tapering) in this situation, the transfer for private savers from money to bonds is without any difficulty, and this transfer requires practically no rise in long-term interest rates. Symmetrically, in the same situation, increasing the central bank’s bond purchases hardly drives down long-term interest rates. Central banks will therefore have to go quite far in reducing the size of their balance sheets for there to be a visible effect on long-term interest rates.