Rate hikes, the effects of the ECB decision on mortgages, shares and bonds: examples and rate hikes
Priority to the fight against inflation
The ECB has therefore chosen the hard line in the fight against inflation: the rate hike decided on Thursday 16 March by the Frankfurt Institute led by Christine Lagarde by 50 cents, which brings the reference rate for the cost of money in the Eurozone from 3 to 3.5%. This is the highest level of European rates since the end of 2008.
The measure had already been announced days ago by the president of the ECB Christine Lagarde but many observers, due to the banking crisis underway in areas outside the eurozone due to the failure of the Silicon Valley Bank in the United States and the serious difficulties of Credit Suisse in Swiss Confederation, believed that the European Central Bank would have opted for the softer line of a hike of 25 cents. So it was not.
However, some results on the inflation front are already visible. According to Istat, inflation in Italy rose by 0.2% per month in February, less than the flash estimates which had recorded +0.3%. Year-over-year increase of 9.1%, down one-tenth of a point from preliminary data.
Let's see what the main consequences of 3.5% interest rates will be for citizens, in their capacity as consumers, savers and investors, starting with mortgages to buy homes, personal loans and the performance of shares and bonds on the financial and currencies, with consequences for the euro and the dollar.
Mar 16, 2023
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