25 members government council approved by the European Central Bank (ECB) last September. “unanimous vote” – according to the president, Christine Lagarde– the biggest raise rate The interests of the euro zone in its 23-year life: 0.75 points up to 1.25 percent. But despite this consensus, “Some” some of its members “voiced their preference” for an increase 0.5 points before that “Recession risks are increasing”as revealed by the release of meeting minutes this Thursday.
This is the second consecutive example internal reasoning monetary authority to shake and intensity should be applied to the rise in the money price to combat the inflationary spiral. Already in July, surprised It’s the first of 11 years with a 0.5 point rate hike, and double what was expected at the June meeting. Also, “some members” of his council have chosen to stick with the 0.25 point increase that the body itself has advanced.
The wild rise in inflation, therefore, seems to have changed the situation. balance of power Inside the ECB board. After coming to the Presidency mario draghi In 2011, directors advocated a flexible and broad interpretation of the ECB’s mandate that takes greater account of the economic situation (‘pigeons‘) were in the majority against those advocating adhering to the goals of price stability (‘Hawks‘). However, in July and September, the thesis of the latter prevailed in terms of rates.
Differences
Councilors who are in favor of a 0.5-point increase, therefore, in the last meeting a “recession being done increasingly likely and will reduce inflationary pressures”. In line with this, a “overly aggressive response” by the ECB “also exacerbate the stagnationwith little benefit for inflation in the short run”. They also argued that the rise in prices was mainly due to: supply factors (increase in energy prices without the effect of rates), fees ruins “temperate” In the medium term, inflation expectations of economic agents are in line with the Central Bank’s 2% CPI target.
completely, governor Pablo Hernández de Cos, the Bank of Spain, said last week that it was “indicative” that rates could rise to a range from the current 1.25%. 2.25%-2.5% in March next year, stay at that level for “most” 2023 and 2024. He cautioned, however, that this is not “at all” a commitment on the part of the ECB, where he is ranked as one of the most relevant “pigeon” members on his council, but rather an exercise in economic analysis to “provide” in economic analysis. citizenship specific orientation“.
In any case, a “a huge number” The 0.75 point increase of preferred managers in September was finally approved. Importantly, it was argued that the ECB’s response should be. “very strong” as time gives inflation was very low (i.e. when the ‘pigeon’ side of the organization took extraordinary measures in the last decade). According to the hearing, “Repeatedly higher-than-expected inflation and upward revision of medium-term inflation forecasts were considered as calls to accelerate the normalization rate of monetary policy.”
Source: Informacion
Christina Moncayo is a contributing writer for “Social Bites”. Her focus is on the gaming industry and she provides in-depth coverage of the latest news and trends in the world of gaming.