ECB

Concerns half-point could set off domino-effect across financial industry knocked by Credit Suisse crisis.

Indeed, concerns about financial stability could lead to more moderate interest rate rises in the future.” The Swiss government had ample firepower to protect consumers and its institutions were “highly effective” and able to deal with financial shocks, Moody’s added. While the ECB recognised a link between the two, Lagarde said: “We don’t see a trade off between price stability and financial stability and handle them separately. In any case, the ECB’s policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy.” “Given recent events, we believe further asset sales are likely, in our view.” Credit Suisse declined to comment. While the share price rebounded on Thursday, speculation is mounting that Credit Suisse will be forced to spin off parts of the business or consider a takeover.

The European Central Bank raised interest rates as promised by 50 basis points on Thursday, sticking with its fight against inflation and facing down calls ...

The euro and bond yields edged up after the move, with bank shares hitting two-month lows before partially recovering. ECB Vice-President Luis de Guindos said euro zone exposure to Credit Suisse was "quite limited" and Lagarde noted that in any case, the policy tools the ECB had at its disposal meant there was no trade-off between financial and price stability. That left the ECB in a dilemma, pitting its inflation-fighting mandate against the need to maintain financial stability in the face of overwhelmingly imported turmoil. The key worry for the ECB is that monetary policy works via the banking system, and a full blown financial crisis would make its policy ineffective. An ECB Governing Council statement said it was monitoring market tensions and would respond as necessary to preserve price stability and financial stability in the euro area. While it said it was too early to predict future rate moves, the ECB rejected suggestions that its campaign to tame inflation was a threat to financial stability, arguing that euro zone banks were resilient and that if anything, the move to higher rates should bolster their margins.

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FRANKFURT: The European Central Bank stuck to a planned interest rate increase on Thursday (Mar 16) as it remained laser-focused on battling sky-high ...

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The European Central Bank raised rates by 50bp to 3.5% on the main refinancing operation on Thursday and reiterated plans to cut purchases under its Asset ...

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The dollar fell and the euro rose on Thursday after the European Central Bank raised interest rates as planned despite market chaos in recent days, ...

NZ Dollar/Dollar The euro was up 0.38% to $1.0615 while the dollar index fell 0.258%. Dollar/Norway Sterling/Dollar Euro/Dollar It's a bit of an anchor, as policymakers should be at times like this," she said. Dollar/Swiss They would immediately have started speculating what are they hiding?" Dollar/Yen "If they didn't do anything, if there was no hike, people would have been more panicked. Higher rates on U.S. government debt than other countries has fortified the dollar, as has a relatively strong economy.

There are calls for a pause on further rate hikes on fears the turmoil could spread and turn into another global financial crisis.

Even though the European Central Bank appeared to choose fighting inflation over defusing banking instability, its struggle to tighten interest rates any ...

equivalents were steadier about 2.5%, but five-year "breakeven" inflation rates from the index-linked market fell to 2.3%. lender's shares showed investors were still worried about cracks in the sector. bank failures, a near-death experience for Switzerland's second-biggest lender Credit Suisse and wild swings in bank stocks and bond markets, the [ECB stuck to its plan](/markets/europe/ecb-rate-hike-plans-clouded-by-financial-turmoil-2023-03-15/) for a half-point interest rate rise to 3.0% - its highest level in 14 years. The Bank of England has barely a quarter-point hike to 4.25% left, if you believe money markets, whereas a 4.75% peak rate was in the price just eight days ago. While all remain above 2% inflation targets, the euro zone, five-year, five-year forward inflation-linked swap actually fell 10bps over the week to just 2.3% even as peak ECB rates were revised down sharply. [JPMorgan's economists](/markets/us/wall-street-analysts-see-direct-economic-growth-hit-svb-fallout-2023-03-16/) reckon heightened regulatory scrutiny of smaller U.S. "U.S. high-yield "junk" bond borrowing premia over U.S. For the stock market to be a better gauge of upcoming economic strength than the bond market would be unusual indeed. Federal Reserve and Bank of England have been crushed. banks and a [run on deposits to larger institutions](/business/finance/deposits-have-started-moving-money-market-funds-goldman-sachs-2023-03-16/) could hit loan growth hard. Register for free to Reuters and know the full story

The European Central Bank needs to keep raising interest rates because underlying price growth is sticky, two policymakers seen as hawkish said on Friday, ...

"Even the current events on the financial markets do not change my view that we need to continue," Kazimir said in a blog post. ECB President Christine Lagarde said during her news conference on Thursday that the euro zone's central bank would have "a lot more ground to cover" in raising rates if its current forecasts held up. Register for free to Reuters and know the full story But neither policymaker made a case for a rate increase as soon as the next ECB meeting, and Kazimir said it was useless to speculate about the May 4 decision. "I am very well aware of the delicacy of the situation ... [published](/markets/europe/ecb-rate-hike-plans-clouded-by-financial-turmoil-2023-03-15/) on Thursday to accompany a sixth consecutive rate hike by the ECB, which acknowledged the outlook had become more uncertain after the [collapse](/business/finance/bank-lifelines-ease-global-financial-crisis-fears-2023-03-17/) of two banks in the United States and more problems at Switzerland's Credit Suisse.

It took an outbreak of global financial turmoil for the European Central Bank to finally embrace the “meeting-by-meeting” approach it has claimed to have ...

Goldman Sachs lowered its estimate for an interest rate hike by the European Central Bank (ECB) in May to 25 basis points after the central bank raised ...

lender's shares showed investors were still worried about cracks in the sector. Register for free to Reuters and know the full story March 17 (Reuters) - Goldman Sachs lowered its estimate for an interest rate hike by the European Central Bank (ECB) in May to 25 basis points after the central bank raised rates to fight inflation amid calls to rein in policy tightening.

Banks including Goldman Sachs and Barclays now predict only two more quarter-point moves that would take the deposit rate to 3.5%. Morgan Stanley and ABN Amro ...

The Governing Council stuck with its earlier guidance and delivered another 50bps rate hike. It announced no new facilities to support banking sector ...

[Monetary Policy & Inflation](/category/monetary-policy-inflation) [Europe](/category/europe) [Monetary Policy & Inflation](/category/monetary-policy-inflation) But the upwardly revised 4.6% core inflation for this year looks optimistic, according to Overall, reversal of the YTD rally in bank shares was not enough to prompt ECB action on liquidity support. Despite following through on the pre-committed hike, Lagarde said it was not business as usual. And Lagarde’s comments that little progress had been made on underlying inflation and that much ground needs to be covered left a hawkish tone overall.

The European Central Bank (ECB) stuck with its plan to hike interest rates by half a percentage point Thursday, judging that inflation poses a bigger ...

A high level of uncertainty reinforces the importance of being guided by economic data in making policy decisions, Lagarde said. That would weigh on economic growth and inflation, reducing the need for rate hikes. The central bank has now hiked rates at six consecutive meetings since July in a bid to get inflation under control. And data Wednesday showed a stronger than expected increase in industrial production across the euro area. is more than twice the target,” said Sylvain Broyer, chief European economist at S&P Global Ratings. and in rather record time.” However, unlike after previous meetings, she did not signal further hikes to come, which suggests the central bank may now pause to take stock.