ECB Launches “Lift Off” After 11 Years: Hikes 50bps As It Also Unveils italy-Specific QE

0
143

Assessment: The schizophrenic ECB is hiking at the same time as it indicates it will keep buying Italian bonds …

In keeping with media leaks, the ECB did a carbon copy of what the Fed did, and crushed its forward guidance credibility opting to hike 50bps instead, which was to be expected considering Europe’s record inflation. In any case, after almost exactly 11 years, the ECB just hiked rates for the first time since July 2011.

Third Seal: Scarcity on Earth

“When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand.” Rev. 6:5

Looking ahead, the ECB  said that “further normalisation of interest rates will be appropriate” adding that “the frontloading today of the exit from negative interest rates allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions.” This is notable because, as Bloomberg’s Ven Ram writes, the explicit guidance from the European Central Bank as we knew it is gone for now: “apart from saying that further normalization of interest rates will be appropriate, it also had this to say: The frontloading today of the exit from negative interest rates allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions. This approach makes a lot more sense in the current milieu where inflation is running amok.

In any case, “the Governing Council’s future policy rate path will continue to be data-dependent and will help to deliver on its 2% inflation target over the medium term. In the context of its policy normalisation, the Governing Council will evaluate options for remunerating excess liquidity holdings.”

Read More @ Zero Hedge HERE