ECB Raises Interest Rates Less Hard in the Fight Against Inflation
The European Central Bank (ECB) has raised interest rates again in the fight against high inflation. However, that went less fast; this time, a quarter of a percentage point was added compared to half a percentage point last time.
Interest rates are now back at the level of 2008, at the beginning of the financial crisis.
Central bank policymakers continue to look to macroeconomic data for subsequent interest rate decisions. However, they are not moving forward on that yet. The ECB introduced this data-driven approach earlier this year. Before that, they often indicated that even more interest rate hikes were needed.
But in the meantime, central bankers have become more cautious. This is because the consequences of interest rate increases are not measurable after some time. In...