Breaking: ECB Sticks To Rate Hike Of 50 BPS; U.S. Federal Reserve To Follow Suit?
In light of the recent upheaval in the financial services industry, the European Central Bank (ECB) decided to increase interest rates by another 50 basis points on Thursday, sending a message that it is prepared to provide additional liquidity to financial institutions if this becomes necessary.
ECB Announces 50 BPS Rate Hike
As a result of continued inflation that is far higher than the level that is intended, the European Central Bank (ECB) has been sending signals for some weeks that it plans to raise interest rates once more at its meeting in March. The preliminary statistics collected in February indicated that headline inflation was 8.5%, which was significantly higher than the goal inflation rate of 2% set by the central bank.
Read More: Coinbase Delists 6 Top Altcoins Following Internal Review
In its official statement, the ECB was quoted as saying:
Inflation is projected to remain too high for too long. Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points.
“The Governing Council is monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area”, the central bank further stated in the same statement.
Banking Issues & Growing Inflation
The banking industry has been facing significant challenges since last week, when authorities in the United States determined that Silicon Valley Bank was insolvent. The occurrence caused the bank’s international subsidiaries to fail and sparked worries about whether or not central banks are hiking interest rates at an aggressive pace.
Additionally, the ECB updated its forecast for future inflation on Thursday. The current forecast predicts annualized headline inflation at 5.3% for this year, followed by 2.9% in 2024. In December of last year, the bank’s inflation projection for 2023 and 2024 came at 6.3% and 3.4% respectively.
Also Read: Arbitrum To Airdrop ARB Tokens In March, Complete Details Inside
- Can Cardano Save Kadena? Hoskinson Reaches Out After KDA Token Plunges 60% Amid Shutdown
- Analyst Turn Bullish with $400 SOL Target as Hong Kong Approves First-Ever Solana ETF in Asia
- Veteran Trader Peter Brandt Says “MSTR Could Go Underwater” If Bitcoin Repeats 1977 Soybean Crash
- BSC Meme Season Ends as PumpFun Surpasses Four Meme Amid $8M Inflows
- ProShares Files for Index Crypto ETF Tracking Bitcoin, Ethereum, XRP, and Solana
- Chainlink Price Eyes $27 Rebound as Whales Accumulate 54M LINK
- Pi Network Price Wedge Signals a Rebound as Key Upgrades Raise Utility Hopes
- Solana Price Eyes $240 Recovery as Gemini Launches SOL-Reward Credit Card
- XRP Price Prediction Amid Evernorth’s $1B XRP Treasury Plan – Can XRP Hit $5?
- Ethereum Price Targets $8K Amid John Bollinger’s ‘W’ Bottom Signal and VanEck Staked ETF Filing
- Pi Coin Price Eyes 50% Upswing As AI-Powered App Studio Update Ignites Optimism
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
