ECB Raises Key Rates 75 bps as Expected with Inflation Revised Higher and Growth Lower

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    Helmholtz Watson

    ECB raised key rates by 75 bps in its July monetary policy decision following a 50bps rate hike in July, and matching expectations from most analysts.
    [See the full post at: ECB Raises Key Rates 75 bps as Expected with Inflation Revised Higher and Growth Lower]


    Largarde Presser:

    Determined action had to be taken
    Today wasn’t an isolated decision
    Risks to inflation tilted to the upside, risks to growth to the downside
    Next hike not necessarily 75 bps, not the norm
    We will determine on a meeting-by-meeting basis the level that will get inflation back to 2%
    Initial signs of inflation expectations above target warrant monitoring
    Wage growth still contained
    Where we are at is not the neutral rate
    Decision was unanimous, there were different views around the table
    Downside scenario for growth includes negative growth in 2023, sees negative growth in 2023
    We are ‘so far away’ from a policy setting that will be enough to bring down inflation
    We don’t know what the terminal rate is


    Stock markets Reverse Sharply after #ECB sources say ECB Officials Not Excluding 75bps Rate Hike in October if inflation persists

    Do not exclude a 75 basis point hike in October if inflation outlook warrants an additional big step.
    ECB Lane struck a more hawkish tone at the meeting today
    QT is expected to be discussed at the October for the meeting and later dates

    S&P $ES_F $SPX reversed -50 green to red
    NASDAQ $NQ_F $QQQ reversed -220 green to red
    From Europe with love.


    SNB’s Jordan speaks after the ECB rate decision to hike rates by 75 basis points today:

    ECB 75 basis point rate hike not fully surprising
    We must ensure price stability over medium-term
    Gas or power stoppages would have devastating impact on economy’s
    Exchange rates play a role in inflation, when big central banks act this helps us
    You should not be surprised that SNB acts independently
    It is positive for SNB of major central banks normalize
    It would not create difficulty if the ECB takes 100 basis point hikes
    S&P decides monetary policy and regular meetings unless under severe time pressure
    no decision yet on what to decide at September 22 policy meeting
    next step depends on analysis underway, need to gauge inflationary pressure, exchange rate
    uncertainty about inflation much higher than usual, can’t say have reached a peak
    price stability is our mandate of course need to keep impact of policy on economy in mind as well
    Swiss franc rise tends to help rather than hurt
    real effective exchange rate of franc has been astoundingly stable

    The EURCHF has taken a move to the downside today and in the process has move back below the 2015 low near 0.97065.


    ECB’s Lagarde says going forward appropriate pace of future rate increases will be decided on a meeting-by-meeting basis

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