The European Central Bank unexpectedly hastened its ending of monetary stimulus, signaling it is more worried about record inflation than weaker economic growth.
- Terming the war a “watershed” event for Europe, ECB policymakers committed to slow bond purchases from the start of May and could stop the program as soon as Q4.
- Christine Lagarde, President of ECB stated that the governing council expects inflation to stabilize at its 2% target over the medium term, further stating that the war in Ukraine is a significant upside risk, more so energy prices.
- The outcome was defied the economists’ expectations, who projected a delay in key policy decisions to allow officials to assess the situation.
- A number of Governing Council members had earlier confirmed their commitment to ending large-scale asset purchases and negative interest rates but signaled that they plan to delay the action.
The euro pared losses to trade at a largely unchanged level of $1.1061. Italian bonds plunged, signaling the yield on 10-year securities surged 22% to 1.89%.
Euro Stoxx 50 down -3.18%, EUR USD down -0.51%
Source: European Central Bank
