The Key Implications of the Fed’s and ECB’s Recent Monetary Tightening in Ten Minutes

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The Key Implications of the Fed’s and ECB’s Recent Monetary Tightening in Ten Minutes

10 mins.

20 DECEMBER, 2021

ANALYSTS:

Ignacio De la Torre

Leopoldo Torralba

CATEGORIES:

Monetary Policy

The Federal Reserve and the European Central Bank announced last week some relevant shifts on their monetary policies. In the United States, the Fed is going to scale back on its bond-buying programme, preparing for an interest rate hike. In Europe, the ECB said it is going to stop pandemic-linked purchases which have been used as the main mechanism to combat the COVID-19 induced crisis.

What are the implications of such measures?

Will hikes mean a change in our outlook of negative interest rates?

Will Spain suffer financial constraints?