since the 2008 financial crisis so far, European and American central banks loose monetary policy has been maintained for nearly three years. Fed Chairman Ben Bernanke's recent speech that the Fed out of the meaning of the stimulus. A tougher attitude in the fight against inflation, the ECB unexpectedly in March, expression of the strong interest rate increase will, and hiked interest rates by 25 basis points, the benchmark interest rate rose to 1 World Pipe network informed.25 percent on April 7 World Steel Pipe News . This is the European Central Bank since the action of the first rate hike since July 2008, the global economy into deep recession since the large developed economies, the first to start raising interest rates the central bank. Also in the April 7, the Bank of Japan to maintain the zero interest rate unchanged, the Bank of England kept its benchmark interest rate at 0.5% of the ultra-low-bit constant.
In short, a target of criticism in the European Central Bank first embarked on a road exit to stimulate policy. Factors and currency credit spread arbitrage will make euros is expected to continue to remain strong, but a lot of uncertainty to the increase in the euro zone's economic recovery and debt problems. European Central Bank will continue to raise interest rates, I am afraid to spend a period of observation period in order to have conclusive.
euro area core countries and peripheral countries such imbalance, the ECB probably did not dare to rule out the future direction of monetary policy to the possibility of repeated Therefore, the European Central Bank President Jean-Claude Trichet stressed that the April 7th, "The ECB has not decided to open the rate hike cycle. This means that whether the ECB will continue to raise interest rates or the euro area periphery countries to withstand the force and the evolution of the European debt problems, the current euro area monetary policy can be described as being in the stage of testing and observation. The intensity of the interest rate hike expectations, it is likely the dominant trend of the next stage of the Euro. If the euro against the dollar has remained above the high of 1.4, the euro area exports, tourism, education and other industries to produce inhibition. Chinese exporters, the strong euro is good news, the euro's strength is likely to bring a more robust external demand in Europe.
ECB rate hike is the resolution, causing no small controversy. View from the single target of the anti-inflation, the ECB rate hike of course, is reasonable. According to Eurostat data released on March 31, the euro area March initial value annual rate of consumer price index rose 2.6 percent, the highest level in 29 months, again higher than the ECB's 2% of the control objectives. At the same time, the euro area "locomotive" of the German economy is very strong and should be able to withstand the impact of rate hikes. The German Ministry of Economic Affairs announced on April 6, the data show that manufacturing orders in Germany in February to a seasonally adjusted monthly rate increase of 2.4% annual rate increase of 21.7 percent, far exceeding market expectations. Germany, "World Journal" reported on April 7 also pointed out that Germany eight top Economic Research Institute jointly announced the first half of the economic forecasts, saying the next two years the German economy will achieve growth of 2.8% and 2% respectively, this result is significantly better than Last year, the fall of 2% forecast. Since the rising inflation, the economy warming, raise interest rates seem to be beyond reproach.
However, from a more comprehensive point of view into consideration, the ECB rate hike is still slightly appear to some radical and adventure. First of all, an important reason for the euro area the recent rapid rise in the rate of inflation is the rapid rise in international energy prices. The European Central Bank interest rate decision, does not alter the proliferation of dollar liquidity, we can not stabilize the situation in Libya and the Middle East, therefore, I am afraid not very useful for the suppression of the euro area energy prices. Secondly, although the German economy is very strong, but the euro-zone peripheral countries are still mired in the quagmire of debt. April 6, Prime Minister Jose Socrates of Portugal, the Portuguese Government has decided to apply for financial assistance to the European Commission, the financial situation has been difficult to sustain. Thus, Portugal became the third euro-zone countries to apply for relief after Greece and Ireland. The same day, the 10-year bond yields in Portugal has risen to a new high of 8.78 percent, its financing costs will rise further after the ECB rate hike. The same is true a few other marginal countries. According to Credit Suisse analyst Luca Paolini, estimates that the ECB rate hike, make Greece the cost of financing in the market to increase by one percentage point, the public debt increased by 1.6%. Therefore, the European debt to raise interest rates may make the problem worse.
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