ECB Accounts: Large majority agreed with proposal to raise key rates by 50 bps

The accounts of the European Central Bank's (ECB) March policy meeting revealed on Thursday that a large majority of the Governing Council agreed with Chief Economist Philip Lane's proposal to raise key rates by 50 basis points (bps), per Reuters.

Key takeaways

"Members widely agreed that bank credit had become more expensive."

"More time was needed to fully assess the overall effect of the monetary policy stance on financial conditions."

"Some members would have preferred not to increase the key rates until the financial market tensions had subsided."

"Monetary policy still had some way to go to bring inflation down, including in the case that the baseline of the March ECB staff projections materialised."

"If the inflation outlook embedded in the March ECB staff projections were confirmed, the Governing Council would have further ground to cover in adjusting the monetary policy stance."

"Financial market tensions were seen as a source of significant uncertainty for the economic and inflation outlook."

"Unless the situation deteriorated significantly, the financial market tensions were unlikely to fundamentally change the Governing Council’s assessment of the inflation outlook."

"The point was made that, in the context of tighter monetary policy, pockets of financial vulnerability had to be expected."

"It had to be considered that the transmission of monetary policy impulses was likely to be stronger at times of market stress than in calmer times."

"Members assessed that there were both upside and downside risks to the inflation outlook."

"A number of members seeing risks to inflation as tilted to the upside over the entire horizon."

Market reaction

EUR/USD largely ignored this publication and was last seen trading modestly higher on the day at 1.0973.