ECB leaves rates unchanged, starts pulling plug on bond buys

foxbusiness.com:

FOX Business correspondent Edward Lawrence with the latest fed decision on 'Making Money.'

FRANKFURT – The European Central Bank left interest rates unchanged as expected on Thursday and signalled an early end to its last remaining bond purchase scheme, wrapping up a decade-long experiment in hoovering up debt across the 20-nation euro zone.

The ECB raised interest rates to a record high earlier this year but unexpectedly benign inflation data over the past few months has all but ruled out further policy tightening, shifting the debate to how fast it will reverse course.

Looking to stem these intensifying rate cut bets, the ECB did not even hint that policy easing was creeping over the horizon and instead maintained its guidance for steady rates ahead.

FED LEAVES INTEREST RATES UNCHANGED AGAIN, SIGNALS THREE CUTS COMING NEXT YEAR

«The key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to (the inflation) goal,» the ECB said in a statement.

Signage is seen outside the European Central Bank (ECB) building in Germany.  (Reuters/Wolfgang Rattay / Reuters)

Markets on the other hand see two cuts by April and 155 basis points of easing in all of 2024, even though a host of conservative policymakers have tried to push back against those expectations in the run up to the December meeting.

Attention now turns to ECB President Christine Lagarde's 1345 GMT news conference, where she is expected to temper rate cut bets but is unlikely to repeat her previous guidance that several quarters of steady rates are ahead.

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Pulling the plug on its last bond-buying scheme, the 1.7 trillion euro Pandemic