The central bank repeats that the securities purchases are expected to be completed in the third quarter.
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As expected, the European Central Bank will not make any major changes in monetary policy at Thursday’s interest rate meeting. The interest rate will remain unchanged, and the plan to close the securities purchases in the next quarter is repeated.
The central bank writes that interest rate hikes will not be implemented until “some time” after the securities purchases have been completed. During the press conference, Governor Christine Lagarde explained the term “some time after” by saying that the bank is given flexibility, and that this can mean anything from “a week to several months after”.
– Inflation has increased significantly
The meeting comes after inflation in the eurozone reached an annual 7.5 per cent in March, which is far above the target of stabilizing inflation around two per cent in the medium term.
– Inflation has increased significantly and will continue to be high in the coming months, mainly due to the sharp increase in energy costs, says ESB in the report.
– The Central Bank Board will take the necessary steps to fulfill the ECB’s mandate to implement price stability and contribute to ensuring financial stability, it is further stated.
– Increased risk
The meeting comes after inflation in the eurozone reached an annual 7.5 per cent in March, which is far above the target of stabilizing inflation around two per cent in the medium term.
– The upside risk to inflation has increased further, especially in the short term, says Governor Christine Lagarde during the press conference.
Few economists expect the central bank to start raising interest rates before December, but the market predicted before the meeting that the ECB would leave negative interest rates by the end of the year and thus implement two interest rate hikes this year.
Lagarde says during the press conference that the central bank has not yet decided when in the third quarter they want to close the securities purchases. This she says will be decided in June.
Ahead of the meeting, there was great excitement about whether Lagarde would come up with hints that this could happen early in the quarter, which could open the door for an interest rate hike in September.
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