Money
ECB Confirms Plans to Roll Back Easy Money as Ukraine War Fuels Inflation – MarketWatch
By Tom Fairless
FRANKFURT–The European Central Bank confirmed plans to rapidly roll back the easy money policies adopted during the Covid-19 pandemic as the war in Ukraine fuels an unprecedented rise in inflation.
Major central banks including the Federal Reserve are laying plans for the most aggressive cycle of interest-rate increases in decades, with sweeping implications for global asset prices. Policy makers are keen to remove pandemic-era stimulus measures to regain control over inflation, which has surged to multidecade highs around the world.
The ECB said in a statement that recent economic data made it more likely that the bank would end its net bond purchases in the third quarter. The central bank said it would reduce its net bond purchases steadily, from 40 billion euros ($43.57 billion) in April to EUR30 billion in May and EUR20 billion in June, confirming earlier plans.
Investors will now turn to President Christine Lagarde’s news conference, starting at 1230 GMT, for clues about how soon the ECB might start to increase its key interest rate. That rate is currently set at minus 0.5% and has been below zero for almost eight years.
Write to Tom Fairless at tom.fairless@wsj.com
The Federal Reserve has created a serious headwind for investors.
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