- Prior decision
- Main refinancing rate 3.00% vs 3.00% expected
- Prior 2.50%
- Deposit facility rate 2.50% vs 2.50% expected
- Prior 2.00%
- Marginal lending facility 3.25%
- Prior 2.75%
- Intends to raise interest rates by another 50 basis points at its next monetary policy meeting
- Will then evaluate the subsequent path of its monetary policy
- Will stay the course in raising interest rates significantly at a steady pace
- And keep them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2% medium-term target
- Future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach
- Full statement
The decision is as expected and the ECB sticks to their previous language as they tick all the boxes with what almost everyone anticipated ahead of the meeting decision here. The key phrase to note is that they do commit to a 50 bps rate hike in March but says that they will then "evaluate the subsequent path of its monetary policy".
The euro is maybe not liking that bit of uncertainty but I would expect Lagarde to clear it up by saying that does not mean a pause/stop in the tightening cycle. EUR/USD now down 0.2% to 1.0965 from around 1.0990 from before the decision.
