2007 U.S. Economic Events & Analysis
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ECB Announcement
Definition
The European Central Bank Governing Council consists of 18 members. The Committee meets twice a month. The first monthly meeting of the month is devoted to monetary policy. Changes in monetary policy if any are announced immediately after the meetings. A press conference is held about 45 minutes after the meeting ends. A statement is read concerning their action -- or lack of it -- followed by a question and answer period. The ECB does not publish any minutes for its meetings. Why Investors Care

Released on 3/8/07
Change
 Actual 25bp  
 Previous 0 bp  
   
Level
  Actual 3.75%  

Highlights
As expected the European Central Bank increased its policy interest rate by 25 basis points to 3.75 percent even though inflation has been below the Bank's 2 percent inflation ceiling for six months. However, the ECB's other pillar of monetary policy soared by 9.7 percent for the three months ending in January when compared with the previous year. This is more than double the Bank's 4.5 percent target for money growth and has made some governing council members somewhat uneasy. ECB president Jean-Claude Trichet had signaled the move his press conference following last month's Governing Council meeting, when he said "strong vigilance" would be needed to combat future inflationary pressures. Core inflation is expected to rise in the coming months, and Mr Trichet has stressed that the latest wage rounds could pose substantial risks to price stability.

Trends
[Chart] The ECB monitors two "pillars" of monetary policy - the harmonized index of consumer prices (HICP) and M3 money supply - in its objective to control inflation. The ceiling for HICP growth is 2 percent. M3 growth is targeted at a 4.5 percent reference growth rate. The Bank had trouble controlling both but was reluctant to increase interest rates until December 2005. In November, the flash HICP was up 3.0 percent while money supply growth expanded at a rate of 11.7 percent for the three months ending in October when compared with the same three months a year earlier. After a series of rate increases, the ECB is expected to remain on hold for at least the next several months.
Data Source: Haver Analytics

2007 Release Schedule
Released On: 1/11 2/8 3/8 4/12 5/10 6/6 7/5 8/2 9/6 10/4 11/8 12/6
Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov


 
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