ECB kept the rates unchanged

The European Central Bank ECB said in its Governing Council meeting in Frankfurt on Thursday April 11th  that it will keep the rates unchanged.

According to the Central Bank, inflation has continued to fall led by lower food and goods prices in the EU.

ECB said it will continue the data-approach meeting by meeting and that it is determined to ensure the inflation returns to its 2 % medium-term target in a timely manner.

The  Central Bank stated also that it will continue to reduce the pandemic portfolio by 7,5 billion euros per month on average during the second half of this year.

ECB Lagarde: Central bank needs more data to start cutting rates

The President of European Central Bank Christine Lagarde said in today’s press conference in Frankfurt that the ECB needs more data to start cutting rates.

– We are not confident yet, she said referring to the amount of data to start cutting rates and not broad enough.

The ECB decided to keep the rates unchanged in its meeting in Frankfurt today.

Markets are expecting bigger rate cuts for this year – Bloomberg

Markets are expecting bigger rate cuts for this year after the European Central Bank lowered its economic forecast for this year. According to Bloomberg, markets are estimating one percent rate cuts for this year.

The ECB’s new economic growth estimate for this year is 0,6%.

The ECB president Christine Lagarde said in the press conference, that the governing council did not discuss about rate cuts at all during its meeting today.

ECB to keep rates unchanged (updated)

The European Central Bank decided to keep its key rates unchanged at its meeting today in Frankfurt.

The economic outlook is still weak but the inflation has slowed down from last year’s peaks.

The ECB’s economic growth estimate for this year is 0,6% and 1,5% for next year. In 2026 economic growth is estimated to be 1,6%.

Inflation has come down and this year it is estimated to be 2,3% and next year 2,0%. In 2026 the inflation expectation is 1,9%.

ECB to integrate green transition and nature loss to monetary work and supervision

The European Central Bank ECB has published its roadmap for climate and nature plan for years 2024-2025 yesterday. According to the plan, Central Bank will integrate the climate change and its impact on economies, financial markets and preparation of monetary policy decisions.

This means in practise that ECB will integrate green transition into macroeconomic models and develop risk monitoring further. Sustainable finance is seen as one of the tools.

ECB will also contribute their findings to stress testing in Fit for 55. The Central Bank will also introduce climate related disclosure requirements in the collateral framework from 2026 onwards.

In the banking supervision, the Central Bank will monitor the green transition planning and implementation.

The ECB has also determined to green the ECB’s non-monetary policy portfolios and the Bank will also disclose the process.

Opinion: Why Fed and ECB have different economic measures?

The ECB President Christine Lagarde explained the Central Bank’ s data-driven analysis and research related to macroeconomics and future monetary policy decisions in the press conference in Frankfurt today.

According to her, the central bank is following the wage agreements closely now during the first quarter but also the January and February inflation figures. And the central bank’s economic projections are published at the next press conference in March the 7th.

The Central Bank stated today that the euro area economy is likely to have stagnated in the final quarter of 2023. This is opposition to the US economy, which reported today 3,3% growth during the last quarter. According to the US Department of Commerce, the consumer spending was the main driver in the growth.

Why these blocks have so different economic situations at the moment? One reason is the monetary policy strategy. Both central banks have 2 % inflation targets and they have both used pandemic stimulus packages for the economies. The US Federal Reserve has also the full empolyment strategy in their monetary policy tasks, which lacks in the euro area.

This has led for example to the consumer spending power discussions in the US and Fed Chair Jerome Powell has stated several times that wages are not the primary inflation accelerators. In contrast to the messages from the ECB.

Today’s Ifo-index from Germany, estimating weaker business outlook, is part of weak signals from the growth engine of European corporates. And this should be an alarm bell for the European elite politicians and central bankers. Things need to change if European Capital and Banking Union are to be accelerated, not to mention green transition and Climate Change. Governance and strategy are key elements for the needed change.

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ECB kept the rates unchanged (updated)

The European Central Bank, ECB kept the key monetary rates unchanged at its meeting today in Frankfurt.

The financial markets rate cut discussions increased at the end of last year when the inflation pressures eased somewhat. In January the President Christine Lagarde said the first rate cut could happen in summertime.

– Aside from an energy-related upward base effect on headline inflation, the declining trend in underlying inflation has continued, the Central Bank said today.

According to ECB, the future rate decisions will be set at sufficiently restrictive levels for as long as necessary.

Today the German Ifo-index declined more than estimated showing the German weak business outlook. The index was 83,5 while the estimate was 84,8

The stocks were trading down in Europe before and after the monetary meeting decisions. Dax-index was down 0,55% to 16.797 points, CAC40 index was down 0,55% to 7414 points and London FTSE 100 index was down 0,15% to 7516 points.

In Asia, Tokyo closed today up 0,11 % to 2531,92 points and Hang Seng closed up 1,96% to 16.211,96 points in Hong Kong.

ECB monetary meeting today

The European Central Bank is having its first monetary meeting this year today in Frankfurt.

The recent market discussion of the possible rate cut timing has been on hold since Ms Christine Lagarde said in January it could be summertime this year.

The “minutes” of December 2023 meeting show that the market expectation at that time was more quickly. The minutes reminds that a 25 basis points cut in April 2024 has been fully priced in markets as of December 13th.

The ECB decided to keep the rates the same at its December 13-14th meeting in Frankfurt. The rates are 4% for deposit facility, 4,50% for refinancing operations and 4,75% for marginal lending facility.

UK: Jeremy Hunt will present tax cuts in Spring Budget – Sky

The UK Chancellor Jeremy Hunt will present tax cuts in the Spring Budget in March, according to Sky news.

Mr Hunt was speaking in Davos WEF meeting in Switzerland where he also stated that growth will be the target of the budget.

The tax cuts are also seen helping households in the inflation and high rates era. The annual inflation was 4% in December, when the monetary policy target of the Bank of England is 2%.

The high inflation is also estimated to delay the first rate cuts in the UK and other financial markets. The ECB President Christine Lagarde has lately signalled that the first ECB cuts could be in summer.

The next monetary policy meeting will be in the 1st of February after  the US Federal Reserve at the end of January.

ECB Lagarde: Year 2023 was constant change – inflation target remains

The President of the ECB, European Central Bank Christine Lagarde said in her X- account that the year 2023 has been about constant change and challenges. Climate crises, global economy, geopolitical risks and inflation have impacted the work in the central bank.

She assured though that the central bank is committed to work to mitigate the inflation and to bring it down to the 2% target levels.

She reminded also that the ECB has got a new member, Croatia, during the year and it is now the 20th memberstate.

-As we look forward to the festive season, I wish you all a joyful holiday and a good start to 2024!, she concluded her festive greetings.