Why does the ECB keep interest rates at historic lows? | DW News

The European Central Bank (ECB) has announced it will roll back its €1.85 trillion ($2.09 trillion) Pandemic Emergency Purchase Program (PEPP).

The crisis-era stimulus was launched in March 2020 to ease the impact of the coronavirus pandemic and will wind down in March 2022.

"Overall, society has become better at coping with the pandemic waves and resulting constraints. This has lessened the pandemic impact on the economy,'' ECB President Christine Lagarde said.

But the ECB kept the door open to restart emergency support.

Meanwhile, the ECB kept the key interest rate for the currency area of 19 states at a record low of 0%.

Critics accuse the ECB of using all the cheap money to fuel inflation.

Outgoing Bundesbank President Jens Weidmann had repeatedly warned against underestimating the risk of too high inflation.

Monetary policy should "not stick too long to its currently very expansionary course," he said.

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#ECB #Euro #Inflation

[hsk]

Everything rises by 10 -50%
Central banks : "inflation is 5%"

[gunsel]

These prices are here to stay regardless of inflation next year

[alexturcin]

What a jolly smiley chap talking about inflation soaring all across Europe. He gets so enthusiastic while talking about prices and interest rates increasing.

[annoyingbstard]

Printing money for pandemic payments, competition in the bond markets for record borrowing, supply chain delays, untimely new taxes. Who didn’t expect interest rate rises and/or inflation?

[CplusO]

World wide inflation. Here in Australia timber, steel and aluminium are up over 50 percent this year.

[razikhan]

Gas 41% higher, cooking oil 30%, tomato paste 20%, and yet they’re saying inflation is 4.5%? Which school did you go to learn mathematics?

[jintarokensei]

Cuz free money is addictive. And the inflation tax is stealthy, nobody notices being robbed by losing purchasing power.

[daiweili]

is that a funny topic? people are suffering for the higher price and they discuss this inflation issue with laughing and smile

[luisevieten]

Even if the inflation rate goes down again do you really think consumer prices will go down again? We need pay rises !

[bigboss]

Yeah right, using the re-opening as an excuse while ignoring the fact that loads of money were printed last year. But hey, high inflation means its easier to pay off debts at the expense of savers. There are no free lunches.

[intsfanatic]

We have got a president of ECB who is looking inflation data blind-folded. Inflation in Estonia is around 8%. The fact, that she is not going to raise rates next year and possibly not even in 2023, is very alarming. She should step down and let someone more competent steer the monetary policy in EU.

[bobofthestorm]

Every country has US dollar reserves.

The US printed majority of its dollars just recently.

Is it really that hard to understand why we feel this globally?

[frhyuhy]

If I remember correctly it was over 12 years ago that the economy recuired the cantral banks to step in. Problem is everybody loves free money, especially politicians. The economy recovered many years ago. Now it will be very hard to turn it off.

[richdobbs]

Prices will never go down. The target is for 2% official inflation, which probably means something more than that real inflation. There will be continued periodic crisis that will keep the inflation going.

[levanat]

ECB is not raising rates because elites don't need interest on saved lunch money, they need assets to keep rising to enslave working poor. Thank you ECB...

[CovertAnime]

Food banks seem strange in germany (is this germany?) . The lady said she pays a "fraction at the food You pay? Where I'm from food banks are free, and go off people in household.

[podth]

forr prices had risen by 4%? BULL ! my pizza i usually order got up by nearly 50%

[LA]

€3.90 for a cauliflower is shocking. £0.80 in the UK

[sem]

Doesnt matter if they get down the inflation, the already increased prices will remain, just as the salary that has been not risen significantly in ages...

[lliamjurdom]

Its time to scratch around in the dirt for your dinner ... roasted bugs anyone?