The ECB raises rates, regardless of everything. This is the road to nowhere
With no stop towards destruction. The European Central Bank raised the interest rate on its main refinancing operations by 50 basis points to 3.0% at its February meeting, raising borrowing costs to the highest level since the end of 2008 and pledging to ensure a further 50 basis point increase at the next monetary policy meeting in March. The central bank also reaffirmed that it will remain on course for a significant increase in rates at a steady pace and that it will keep them at levels tightening enough to ensure a timely return of inflation to its medium-term target of 2%. In addition, officials announced that the APP portfolio will shrink by an average of €15 billion per month from the beginning of March until the end of June 2023, and that the subsequent pace of portfolio reduction will be determined over time. Interest rates on the marginal lending facility and on the deposit facility were raised to 3.25% and 2.50% respectively. Here is the related graph
Ms. Lagarde is not satisfied with what has been done so far and has already announced a 50 bp increase for March which will not be the last. Moreover, he complains that the European economy has not yet collapsed under his blows
THE ECB BRINGS RATES TO 3% AND WILL RAISE THEM AGAIN.
LAGARDE: "THE ECONOMY IS MORE RESILIENT THAN EXPECTED".
— drb (@doctorbarbieri) February 2, 2023
Of course, we're not in a recession quite yet, or not deep enough yet. We need to push further to the point of blowing up quite a few companies and, perhaps, households in debt at variable rates. This is what happens when you choose to create an "Independent" bank from everything, at least in theory, except from your own ideological preconceptions.
On a monthly basis, inflation has been negative on a monthly basis during the last quarter, demonstrating that the inflationary push is external, but this does not concern Lagarde. So forward on this highway to hell.
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The article The ECB raises rates, regardless of everything. This is the Road to Nowhere comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-bce-aumenta-i-tassi-incurante-di-tutto-questa-e-la-strada-verso-il-nulla/ on Thu, 02 Feb 2023 19:28:42 +0000.