The European Central Bank (ECB) is finally ready to join the global monetary tightening chamber, motivated by action from repeated high inflation records, according to Bloomberg.
Nearly three months after the US Federal Reserve raised its interest rates for the first time, the eurozone counterpart will announce the end of bond markets this week and formally begin the countdown to rising borrowing costs in July.
The ECB has been reluctant to remove incentives as it measures the effects of the war raging just beyond the borders of its monetary zone in Ukraine.
In contrast, most major central banks have tightened their grip, and some are even accelerating. The Fed doubled its interest rate hike last month by half a point, and policymakers in Australia on Tuesday and India on Wednesday could also follow suit.
In this context, with eurozone inflation now at 8.1%, there is a clear consensus in the ECB on the need to start. The controversy now within the board focuses on whether quarterly increases in the unit are enough and how high interest rates should eventually reach next year.
Austrian central bank governor Robert Holzman says anything less than a half-unit move “risks being taken lightly”, while colleagues from the Netherlands, Slovakia and Latvia have openly called for at least one such increase.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
