17.12.2021
Following the U.S. Federal Reserve's announcement on Wednesday, the Swiss National Bank, the Bank of England and the European Central Bank also announced their monetary policy decisions, and with the exception of the SNB, all announced tighter monetary policy.
Inhalt
Tightening of monetary policy
Difficult stock market year ahead
The European Central Bank announced a cautious tightening of monetary policy, which was pretty much in line with market expectations. The ECB kept interest rates unchanged and confirmed that the pandemic emergency purchase program will expire in March 2022. The governing council also decided to expand its asset purchase program to EUR40 billion per month in the second quarter and EUR30 billion in the third quarter to partially compensate for the end of monthly bond purchases of EUR60 billion under the PEPP.
The Bank of England's Monetary Policy Committee decided by a majority of 8:1 to raise the policy rate to 0.25% and by a majority of 9:0 to leave the level of quantitative easing at £895 billion.
The SNB maintained its expansionary monetary policy to ensure price stability and help the local economy recover from the effects of the coronavirus pandemic. It left the SNB's key interest rate and interest rates on sight deposits at the SNB at -0.75%.
One bright spot: Turkey's central bank cut its key interest rate to 14% from 15%, pushing the TRY to a new record low of 15.74.
The Bank of Japan left its monetary policy settings unchanged, but decided to reduce pandemic emergency purchase program from March 2022. The BOJ kept its short-term interest rate target at -0.1% and that for 10-year bond yields at 0%.
European indices initially posted significant gains, but Wall Street was unable to follow suit and traded mixed. U.S. government bond yields consolidated over the course of the last few days and showed little reaction to the central bank news.
In her usual post-meeting press conference, ECB President Christine Lagarde stated that under the current economic circumstances, an interest rate hike in 2022 is very unlikely.
In fact, we can already see that 2022 will be a very difficult year for the stock market. High inflation rates will continue to accompany us. Uncertainty about the emergence of further Corona variants and the resulting political decisions will continue to entail a negative development in economic prosperity. Burgeoning conflicts with Russia and the global wave of refugees are doing the rest. Not to be forgotten is the generally hot stock market and a real estate market that has changed in itself.
We are very much looking forward to another year with you.
Have a nice and relaxing holiday and all the best for the new year. So we also remain with "stay healthy".
Following the U.S. Federal Reserve's announcement on Wednesday, the Swiss National Bank, the Bank of England and the European Central Bank also announced their monetary policy decisions, and with the exception of the SNB, all announced tighter monetary policy.
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