(Bloomberg) It took an outbreak of global financial turmoil for the European Central Bank to finally embrace the “meeting-by-meeting” approach it has claimed to have been following for months. Officials conspicuously dropped those words from their statement on Thursday, after delivering a half-point increase in interest rates that they flagged at their last gathering six weeks ago and hinted at even before that. But they made clear that such guidance on future moves has now been abandoned, pledging to be “data dependent,” with considered judgments on each decision in turn now the overarching mantra. That will give the ECB more flexibility as it navigates an increasingly complicated backdrop even if investors get fewer pointers on where monetary policy may be headed. The shift represents a remarkable twist after disagreements on heeding the “meeting-by-meeting” language escalated publicly just days before the world changed, as Silicon Valley Bank failed and Credit Suisse
The European Central Bank (ECB) is the central bank of the 19 European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.
Central banks are starting to slow aggressive rate rises but are far from done even as recession looms, leaving investors alert to risks that prolonged tightening could hurt the economy more than