![]() Fourth, changes in monetary policy expectations had brought the valuations of riskier assets closer to their long-term averages, in both fixed income and stock markets. Third, expectations of a steeper policy path contributed to halting and partly reversing both the rise in inflation risk premia and the marked depreciation of the euro, thereby offsetting part of the renewed rise in oil prices. Second, monetary policy normalisation in the euro area was expected to proceed at a significantly faster pace than at the time of the Governing Council’s 13-14 April meeting, with a rate lift-off expected in July. First, volatility in financial markets was high by historical standards, reflecting the longer than expected persistence of high inflation and the associated uncertainty about the extent and pace of monetary policy adjustment required to restore price stability over the medium term. The main developments in financial markets revolved around four main themes. Since the Governing Council’s previous monetary policy meeting on 13-14 April 2022, there had been a major shift in monetary policy expectations and actions around the world as inflation had continued to surprise to the upside. Ms Schnabel reviewed the latest financial market developments. Review of financial, economic and monetary developments and policy options Financial market developments Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Amsterdam on Wednesday and Thursday, 8-9 June 2022ħ July 2022 1. ![]()
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