The European Central Bank (ECB) raised rates by 50 basis points to 2.5% and plans to raise them further to 3% next month.
Thereafter however “it will then evaluate the subsequent path of its monetary policy,” indicating a potential pause.
The ECB will also start reducing by €15 billion a month its circa €5 trillion bonds portfolio starting next month.
That’s at a far slower rate than Fed which has been reducing it by $95 billion in aggressive tightening.
Fed’s rates are also far higher at 4.75% with markets expecting them to pause at about 5%, while the Bank of England raised theirs by 0.5% to 4%.
The week of the central bankers therefore has come to an end as a new word now enters the lexicon: disinflation.
The theme for much of last year, inflation, has been turned upside down with its sharp fall now expected for later this year.