Minutes of the European Central Bank’s (ECB) Governing Council meeting on 14 April, published this Thursday, reveal the discussion among participants on how to engage price hike and their desire to raise interest rates.
At the end of that meeting, President Christine Lagarde warned that The loan purchase will end in the third quarter of the yearAlthough he did not specify when, followed by a rate hike,
The minutes show that, despite internal debate, the view prevailed that, given the high uncertainty caused by the invasion of Ukraine, “the alternative character, the gradual nature and ‘flexibility’ should continue to guide the Governing Council’s monetary policy.
To benefit from the additional data and new projections, participants were in favor of delaying a decision on the exact timing of the end of net debt purchases until the June meeting.
He recognized the importance of “leaving the door open” to decision making. All options in JuneIncluding the possibility of taking a decision to end the purchase at the end of the second quarter as well.
According to these documents, the approach agreed by the Council implies that, on the one hand, it maintains the course of a gradual normalization of monetary policy, consistent with its warnings that interest rates will rise at some point after the cessation of debt purchases.
On the other hand, this does not exclude the possibility of a quick increase in time when circumstances so require.
The meeting participants also considered it important to address the issue of a Possible «resurrection» of fragmentation In the financial conditions of the eurozone to guarantee the continuity of monetary policy.
Thus, he referred to the “segregation principle”, which means that a suitable monetary stance can be established regardless of whether or not the relevant instruments are deployed to avoid sudden market turmoil.
It was also argued in the meeting that this FLEXIBILITY This should be a permanent option within the Governing Council’s toolbox and all ECB instruments can be adjusted to include it.
This will ensure that inflation stabilizes around the target of 2% in the medium term.
The minutes of the ECB confirm its intention to raise interest rates as soon as it stops buying debt