ECB Confirms Plans to Rollback the Easy Money Policy

The European Central Bank has confirmed its plans to end the easy-money policies that were adopted during the Covid-19 pandemic as the Russia-Ukraine war causes a rise in inflation.

Major central banks including the Federal Reserve are lying plans for the most aggressive cycle of interest rate increases in decades, taking out implications for global asset prices. Policymakers also insist to remove pandemic era measures to regain control over inflation, which has surged to multidecade highs around the world. 

So far, the ECB has been more cautious than other major central banks that have already raised rates. ECB officials have suggested that if inflation isn't eased, it could soon end its huge bond-buying program and start raising interest rates later this year.

The ECB is still hovering up tens of billions of dollars in Eurozone debt each month, but federal officials have suggested that it can start cutting bond holdings in May. Analysts say the ECB still has too much uncertainty about the effects of the war and too little harsh economic data to act.

Central banks in Canada and New Zealand announced a 0.5% point hike this week. Last month, the Federal Reserve voted to raise the Federal Reserve's benchmark interest rate by a quarter-point from 0.25% to 0.5%, planning six more increases by the end of the year. This is the most aggressive pace of interest rate hikes in over 15 years.