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ECB On Hold, Says Inflation, Growth To Slow Further
"Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation," the ECB reiterated Thursday, while keeping rates on hold, as expected.
That familiar, confident assessment regarding the effectiveness of the monetary policy transmission channel in Europe makes for a rather stark contrast with the Fed's somewhat belabored efforts to explain why aggressive rate hikes haven't meaningfully curbed economic activity in the U
Yet EZU is near its 2021 highs and DAX is at a new high.
JL – another example of the wise old adage that there often is a low correlation between the economy and stocks prices.
For stocks it’s long been flows/liquidity that determine aggregate stock prices. Now one has to also consider model and option positions.