ECB

2022 - 9 - 8

Post cover — Image courtesy of "The New York Times"

European Central Bank Makes Big Rate Increase: Live Updates (The New York Times)

The eurozone's central bank raised rates by three-quarters of a point, matching the biggest move in its history.

The E.C.B. “The E.C.B. [caused by Russia’s invasion of Ukraine](https://www.nytimes.com/2022/09/07/world/europe/eu-russia-putin-gas.html), are the primary culprit, and have households, businesses and policymakers preparing for a particularly dark winter. Traders are watching for whether the European Commission will intervene in the energy markets, in an effort to limit price rises. “We see today’s decision in favor of the larger step as a signal to markets that the central bank is serious about regaining its inflation-fighting credentials,” analysts at Morgan Stanley wrote in a report after the announcement. The eurozone economy is expected to “stagnate” later this year and early in 2023, the central bank said. The index has been on a bumpy ride this year, down more than 15 percent since January, and sits just above its lowest level of the year, struck in July. There is a “really dark downside scenario,” Christine Lagarde, the president of the E.C.B. Now, it is raising interest rates in an effort to “normalize” the policy stance, without it becoming restrictive and slowing the economy. With high energy prices continuing to weigh on businesses and individual households, policymakers expect “to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations,” the bank’s statement said. was one of the last major central banks to raise interest rates to tackle inflation, but Thursday’s move showed it had understood the need to move more forcefully. The central bank targets a medium-term inflation rate of 2 percent.

European Central Bank raises rates despite slowdown fears (The Washington Post)

The European Central Bank raised interest rates for the second time this year in a risky bid to cool off inflation without driving the economy into ...

ECB hikes will make that recession worse, not better,” Robin Brooks, chief economist for the Institute of International Finance, wrote on Twitter. European households and companies are facing a severe energy crunch this winter following Russia’s decision to halt natural gas deliveries to Europe via the Nord Stream 1 pipeline. Moscow blames technical problems with its main pipeline related to Western sanctions over the war in Ukraine. The ECB said the European economy will skirt an outright recession this year, expanding by 3.1 percent. “They are confronting a shock to which there is no good policy response.” ECB staff also have revised up their forecast of future inflation and marked down the euro area’s growth prospects.

Euro holds above two-decade low after record ECB rate hike (Reuters)

The euro held above a twenty-year low on Thursday after the European Central Bank raised interest rates by a record 75 basis points, taking the deposit rate ...

"If the BoJ drops YCC (yield curve control), rate differentials vs the U.S. [read more](/markets/asia/australia-rba-after-rapid-tightening-may-be-case-slower-hikes-2022-09-08/) The yen has been a particular victim of recent dollar strength, partly due to its sensitivity to rising long-term U.S. The U.S. [read more](/markets/europe/feds-collins-more-do-us-interest-rate-hikes-2022-09-07/) [read more](/markets/europe/ecb-poised-another-big-rate-hike-inflation-soars-2022-09-07/)

Watch Christine Lagarde speak after the ECB announces rate hike (CNBC)

European Central Bank President Christine Lagarde is giving a press conference after the bank's latest monetary policy decision.

[Subscribe to CNBC on YouTube.](https://www.youtube.com/c/CNBC?sub_confirmation=1) [after the bank's latest monetary policy decision.](https://www.cnbc.com/2021/04/22/ecb-decision-april-2021.html)

Stock Market Today Live: Dow Falls 100 Points Following Fed ... (The Wall Street Journal)

No matter what the European Central Bank does at its meeting Thursday, a good chunk of the market will be surprised. That raises the risk of an outsized ...

In Spain, shares of Bankinter, CaixaBank and Banco de Sabadell rose between 3.8% and 4.8%. Germany’s 10-year yield was at 1.679% compared with 1.588% before the decision.\nItaly’s borrowing costs saw the largest rise. But markets turned around during ECB President Christine Lagarde’s press conference, where she underlined her concerns about inflation and suggested further large rate-increases could be needed.\n\nAs she spoke, eurozone bonds began to sell off, pushing yields higher. These have been highly sensitive to ECB policy, and the 10-year Italian yield rose to 3.979%, from 3.850% before the decision.\nStocks weakened. Normally higher rates boost the value of a currency, but the primary driver of the euro in recent months has been energy prices.\nEuropean government bond yields rose. The European Central Bank delivered a historic 0.75-percentage-point interest rate increase on Thursday as it battles record-high inflation and an energy crisis in the bloc.\n\nInvestors were initially unimpressed by the move.

Europe Bonds Slide After ECB Delivers Super-Sized Rate Hike (Bloomberg)

Europe's bonds slid after policy makers delivered an unprecedented interest-rate increase to tackle searing inflation, with traders anticipating a further ...

Here Are the Takeaways From the ECB's Big Move (The New York Times)

The European Central Bank said it expected to continue raising rates and raised its forecast for inflation.

The E.C.B. There is a “really dark downside scenario,” Christine Lagarde, the president of the E.C.B. The eurozone economy is expected to “stagnate” later this year and early in 2023, the central bank said. That means that prices are projected to rise faster than the central bank’s 2 percent target for the next two years. said that its future decisions would be “data-dependent,” meaning fresh numbers on things like inflation and jobs will be important for determining the next step the central bank takes. The central bank also published a new set of economic forecasts.

ECB Goes Big With Jumbo Hike as Lagarde Hints More to Come (Bloomberg)

The European Central Bank hiked interest rates by a historic amount and President Christine Lagarde hinted it could do the same again as part of “several” ...

ECB raises interest rates across eurozone by record margin (The Guardian)

European Central Bank sets aside recession fears to increase rates by 0.75 of a percentage point to 1.25%

This hike was also about putting a floor under the euro, and keeping a lid on the extra imported inflation its weakness had brought,” he said. We have incredibly high inflation numbers, we are not on target in our forecast and we have to take action,” she said, adding: “What we know is that we want to get that 2% medium-term target and we will take the necessary steps along the way in order to get there. “So markets were unsure whether the ECB would raise by 0.5% or by 0.75%. We think that it will take several meetings to get there.” The Fed’s main benchmark is 2.25% to 2.5% after several large rate rises, including two of three-quarters of a point. Christine Lagarde, the president of the ECB, indicated the central bank was ready to announce further rate hikes to tackle high inflation and bring it down to its 2% target.

ECB raises rates by unprecedented 75 basis points (Reuters)

The European Central Bank raised interest rates by an unprecedented 75 basis points on Thursday to tame runaway inflation, even as a recession is now ...

That risked pushing up already high long-term inflation expectations, which would signal a loss of confidence in the ECB. Register now for FREE unlimited access to Reuters.com

Monetary policy decisions (European Central Bank)

8 September 2022. The Governing Council today decided to raise the three key ECB interest rates by 75 basis points. This major step frontloads the ...

The Governing Council decided to raise the three key ECB interest rates by 75 basis points. The Governing Council will also regularly assess how targeted lending operations are contributing to its monetary policy stance. In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance. The lasting vulnerabilities caused by the pandemic still pose a risk to the smooth transmission of monetary policy. The Governing Council today decided to raise the three key ECB interest rates by 75 basis points. Based on its current assessment, over the next several meetings the Governing Council expects to raise interest rates further to

Banks lead European stocks higher after record ECB rate hike (Reuters)

European shares rose on Thursday led by gains in bank stocks after the European Central Bank delivered its biggest-ever interest rate hike to combat ...

[(ABF.L)](https://www.reuters.com/companies/ABF.L) slid 7.6% after it warned of lower profit next year, as its Primark fashion business struggles with rising costs and surging inflation hits demand. [read more](/business/retail-consumer/american-eagle-outfitters-posts-net-loss-slowing-consumer-demand-2022-09-07/) [(.SXRP)](https://www.reuters.com/quote/.SXRP) shed 1.6%, with Swedish retailer H&M [(HMb.ST)](https://www.reuters.com/companies/HMb.ST) and Zara-owner Inditex [(ITX.MC)](https://www.reuters.com/companies/ITX.MC) falling after U.S. Register now for FREE unlimited access to Reuters.com [(.STOXX)](https://www.reuters.com/quote/.STOXX) ended a volatile session 0.5% higher, with banks [(.SX7P)](https://www.reuters.com/quote/.SX7P) rising 2.3% as the ECB abandoned the two-tier system for the remuneration of excess reserves.

E.C.B. Raises Interest Rates to Tame Inflation (The New York Times)

The rise of three-quarters of a point, matching the central bank's largest-ever increase, comes as a 'substantial slowdown' in the eurozone economy is ...

Thursday’s move matched the size of increases at the latest meetings of the Federal Reserve and the Bank of Canada, showing that the eurozone’s central bank had joined its international peers in moving forcefully to tame inflation. The E.C.B. Adding pressure on the central bank to act is the weakening euro. Lagarde said the decision to increase the rate by three-quarters of a point had been made unanimously, despite “different views around the table.” They will discuss strategies that could include price caps, mandatory cuts in use and a decoupling of electricity from the price of gas — a factor currently driving the jump in the price of power. Lagarde welcomed the intervention, saying it is up to politicians, not central bankers, to tackle the energy crisis. While the central bank did not forecast a recession, it noted that there was a risk of a complete shutdown of Russian gas supplies and energy rationing that would lead to a recession next year. In August, the eurozone’s [annual inflation rate rose to 9.1 percent](https://www.nytimes.com/2022/08/31/business/eurozone-inflation.html?smid=url-share), a fresh record since the creation of the euro and up from 8.9 percent the previous month. Putin of Russia weaponized his country’s energy exports, restricting the flows of oil and gas to Europe in retaliation for economic sanctions imposed by the European Union. Thursday’s rate increase, which took the E.C.B. “Price pressures have continued to strengthen and broaden across the economy.” Around the world, central banks have been pushing rates higher in larger increments to send strong signals to consumers and businesses that they will bring stubbornly high inflation back down and won’t be deterred by economic pain.

European Central Bank (ECB) Raises Rates by 0.75% (Investopedia)

The European Central Bank (ECB) voted to raise three key interest rates by 75 basis points each on Sept. 8, 2022, with the goal of reducing inflation.

The ECB's Governing Council indicates that it intends to continue reinvesting, "for an extended period of time," all principal payments received from maturing securities that were acquired under its Asset Purchase Programme (APP). Additionally, the ECB warns that pressures on prices "have continued to strengthen and broaden across the economy," with the result that inflation may continue to rise "in the near term." [European Central Bank (ECB)](https://www.investopedia.com/terms/e/europeancentralbank.asp) voted to raise three key interest rates by 75 [basis points (bp)](https://www.investopedia.com/terms/b/basispoint.asp) each on Sept. The three key interest rates being increased by the ECB are those on: the main refinancing operations, the marginal lending facility, and the deposit facility. [bottlenecks](https://www.investopedia.com/terms/b/bottleneck.asp)." The goal is to bring annual [inflation](https://www.investopedia.com/terms/i/inflation.asp) back down to the ECB's medium-term target of 2%. The ECB's Governing Council indicates that, during its next several meetings, it "expects to raise interest rates further to dampen [demand](https://www.investopedia.com/terms/d/demand.asp) and guard against the risk of a persistent upward shift in inflation expectations." In the ECB's view, the main culprits are very high energy prices that are reducing people's The new rates will be, respectively, 1.25%, 1.50%, and 0.75%. Meanwhile, ECB staff have revised their inflation projections significantly upward, forecasting average annual inflation figures of 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024.1 As noted above, each will be increased by 75 basis points. The ECB observes that, after rebounding in the first half of 2022, the eurozone economy is now experiencing a "substantial slowdown" and is expected to "stagnate" from later in 2022 through the first quarter of 2023.

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