What will be the Highest level of ECB Deposit Facility Rate before the next Euro Area (EA) recession?
Central bank key interest rates tend to implicate the overall strength of the economy in stable, developed countries and currency areas. Unlike the Federal Reserve, ECB maintained its extremely low interest rates throughout the economic upswing of the previous decade. The European Central Bank interest rate for bank overnight deposits has remained negative since June 2013. As of January 2022, it stands at -0.5%.
While the economies recover from Covid recession and inflation runs relatively high on both EA and US, Federal Reserve has already announced its intentions to raise its key interest rates during 2022. Will ECB at some point see the EA economy fit enough to follow Fed ´s lead and try to normalize its interest rate levels?
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