save it policy The position is widely unchanged on Thursday, the European Central Bank (ECB) commits plans To slowly relieve unusual stimulation as fears over recordHigh inflation outweighs concerns about a war-related recession.
The European Central Bank had lowered pace of money-Print for months but only loose outline schedule to roll back supportemphasizing flexibility as a conflict in Ukraine and skyRising energy prices can suddenly change expectations.
Confirming its earlier directives, the European Central Bank said that plans To reduce bond purchases, known as quantitative easing, this quarterthen terminate it at some point in the third quarter.
Interest rates, however, will only go up Some time after the end of Buying bonds will be gradually, the European Central Bank added.
“The Board of Directors considered that the data received since then last The meeting reinforced her expectation that net asset In-app purchases should to conclude in The third quarter said the European Central Bank in Declaration.
the size of buy bonds in the third quarterwill be determined later.
Among the most cautious central banks in The worldThe European Central Bank is late behind Nearly all of her major peers, many of That started to raise rates last year. In the past Only two days central banks of Canada, South Korea and New Zealand all increased cost of borrow.
Meanwhile, the US Federal Reserve is expected to raise interest rates by eight times or more over The next Two years, leading The world in policy tighten.
“Any modifications to key The European Central Bank will take interest rates place Some time after the end of Board of Directors net Purchases under the APP will be gradual, “the European Central Bank added.
The European Central Bank bought nearly 5 trillion euros ($5.4 trillion). of public And private debt Since 2015, everything with the aim of Reviving inflation, which underhot the bank’s 2% target for After years of agglomeration debt crisis.
But inflation rose unexpectedly up in Recent months, leaving decision makers in A dilemma as they try to reconcile two opposing economic forces.
On the one inflation hand already at record- high 7.5%, with More increases are expected. On the other hand, the eurozone economy idle now, at best with the influence of War has damaged families and businesses for 19 years countries.
Before the meeting, host of conservative Policy makers, including central bank rulers of Germany, Holland, Austria and Belgium have it all made the case for rate It rises, worried that high inflation may drag on too long.
Add to their hard-core condition, for longer-term Inflation expectations, a key Measurement for credibility of policymoved decisively above the European Central Bank’s 2% target, although wages have yet to respond to it higher the prices.
The European Central Bank has maintained its official guidance anyway rate Rise will happen “some time” after the end of Buying bonds, a schedule he said could mean weeks or months.
Markets now pricing in combined 70 base points of walking long distances in ECB deposit minus 0.5% rate This is amazing yearEven if it isn’t, one of 25 European Central Bank policy makers called for Such an aggressive emphasis.
Fueling the caution of policy makers is the rapidly deteriorating economic outlook.
Energy Prices Paid higher Because of the Ukraine war drains family savings and uncertainty caused Because of the conflict stops the investment of companies. Banks also tighten access To be given credit as they naturally do during wars, which could exacerbate the downturn.
Meanwhile, political doves argue this matter the most of Inflation A result of External supply shocks, so that inflation naturally declines over the time.
In fact, higher energy prices tend to deflate over The tallest term because they carry back growthso there is a file risk Inflation in the eurozone will only happen once again located very low.
By balancing the two opposing forces, the ECB is likely to argue that inflation – is key policy The goal – is the biggest riskalthough policy makers will continue to advance gradually changes And prepare to change course in no time.
