Higher interest rates? The European Central Bank is still hesitant

Despite a record inflation rate of 7.5 percent, the European Central Bank is committed to a zero interest rate policy. Economists warn that inflation can become permanent.

that the European Central Bank (European Central Bank) will actually raise the key interest rate on Thursday, no one expected anyway – although many considered such a move long overdue in light of high inflation. It was surprising that monetary regulators did not allow themselves to be swayed for indicating when a rate hike might occur for the first time in years. The central bank merely repeated that government bond purchases would gradually decrease until June.

What happens in the third quarter will depend on economic data. In her speech, she was the President of the European Central Bank Christine Lagarde Not very binding as to when to raise interest rates after the end of the net purchases of bonds. Bond purchases can be terminated “anytime in the third quarter” and it is not possible to say how much interest rates will be raised later. The first rate move may be weeks, but also months after the bond purchases have ended. “We will look at interest rates when the time comes,” Lagarde said.