The sole objective is 2% and step-by-step, the European Central Bank (ECB), like a tightrope walker, has been carefully calculating its moves, listening to its heart, looking for balance, adjusting its posture and deciding the next move to bring inflation back to its 2% target.
At the last meeting, the ECB decided to raise rates by 25 basis points, the same as the previous meeting. However, the ECB's decision to continue its hawkish policy comes with consequences. One example is the slowdown in bank lending. The constant hikes over the past year have weakened the demand for bank credit, causing a cascading slowdown in various sectors (real estate, construction) and consumer spending. Why does the ECB continue with its hawkish policy? The answer to this question is linked to high inflation levels and the differences among various countries in the eurozone. ...
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