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ECB Deposit Facility Rate & next EA recession

Question

Central bank key interest rates tend to implicate the overall strength of the economy in stable, developed countries and currency areas. Unlike the Federal Reserve, ECB maintained its extremely low interest rates throughout the economic upswing of the previous decade. The European Central Bank interest rate for bank overnight deposits has remained negative since June 2013. As of January 2022, it stands at -0.5%.

While the economies recover from Covid recession and inflation runs relatively high on both EA and US, Federal Reserve has already announced its intentions to raise its key interest rates during 2022. Will ECB at some point see the EA economy fit enough to follow Fed ´s lead and try to normalize its interest rate levels?

What will be the Highest level of ECB Deposit Facility Rate before the next Euro Area (EA) recession?

Question resolves when, according to the Eurostat, the Euro Area real GDP officially contracts (Quarter-on-quarter) for two successive quarters, which confirms a recession.

Deposit Facility Rate, among with other ECB key interest rates, are publicly announced on ECB website, and historical rates can be found from multiple sources. See, for example: https://www.ecb.europa.eu/stats/policy_and_ex…

Given the usual publishing delays with the macroeconomic data, the last rate level to be taken into account while defining the "highest Deposit Facility Rate" will be the rate at the end of the last day of the particular quarter which predates EA entry into recession, NOT the day when the news outlets report about the beginning of the recession.

Categories:
Economy – EU

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