ECB Hikes Benchmark Interest Rate By 0.25% From 1.25% To 1.50% As Expected, Likely Top For Now

Tyler Durden's picture

The fully priced-in rate hike has come and gone, with the ECB raising the benchmark interest rate from 1.25% to 1.50%. Now the question is what happens next: at 8:30 am is the Trichet press conference which we will carry live. Everyone will wonder if this is the end of the hiking cycle, which it almost certainly is as any more hiking will cause a full blown collapse within the PIIGS countries. If so, look for the market to promptly sell the news.

Full release:

 

PRESS RELEASE

7 July 2011 - Monetary policy decisions

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

  1. The interest rate on the main refinancing operations of the
    Eurosystem will be increased by 25 basis points to 1.50%, starting from
    the operation to be settled on 13 July 2011.

  2. The interest rate on the marginal lending facility will be increased by 25 basis points to 2.25%, with effect from 13 July 2011.

  3. The interest rate on the deposit facility will be increased by 25 basis points to 0.75%, with effect from 13 July 2011.

The President of the ECB will comment on the considerations
underlying these decisions at a press conference starting at 2.30 p.m.
CET today.