The word for the day is "hawk" with seven central banks hiking rates on Thursday.
Five of 'em were 50bp shunts higher: Swiss National Bank, Bank of England, European Central Bank, Denmark central bank, and the Banco de México.
NAB response:
- ECB President Lagarde didn’t mince words, saying “anybody who thinks that this is a pivot for the ECB is wrong…we should expect to raise interest rates at a 50bps pace for a period of time ” and compared the outlook to the Fed, where she said the ECB “had more ground to cover”, implying that she saw the policy rate needing to be raised by at least another 100bps, after the Fed’s projection of 75bps more.
- On top of this, quantitative tightening will begin from March at an initial rate of €15b per month until the end of June, with the pace after that yet to be determined.
- This was not a hawkish developments though, at least relative to expectations, being well flagged and with some thought that QT could begin sooner than March.
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Earlier:
The European Central Bank on Thursday:
- ECB raises key rates by 50 bps in December monetary policy decision, as expected
- ECB's Lagarde opening statement: A recession would be relatively shallow
- Lagarde Q&A: We should expect to hike at 50 bps pace for a period of time
- ECB sources: More than one-third of ECB officials wanted to hike by 75 bps
- ECBs Lagarde offered back to back 50 bp hikes to secure majority
