European Central Bank (ECB) Rate Announcement and Press Conference

Controlling interest rates is the key mechanism of monetary policy, and the ECB influences interest rates by first changing the “overnight rate” through the purchase or sale of government bonds. The European Central Bank’s decision to increase, decrease, or maintain interest rates. Lowering rates can spur economic growth but may incite inflationary pressures. On the other hand, increasing rates slows inflation but can stymie growth.

The European Central Bank makes a concerted effort to be transparent in its policy. Frequent speeches by Bank Governers make policy goals clear and the Bank adheres to a stated inflation target of 2 percent, changing rates accordingly to meet that goal. Because of this, rate decisions are generally well anticipated, but very important nonetheless.

The ECB’s rate decision has an enormous influence on financial markets. Because the ECB interest rate is essentially the return investors receive while holding Euros, changes in rates affect the exchange rate of the Euro.

Release schedule: About 7:30 AM EST, the Governing Council meets twice a month

Source of report: European Central Bank

Web Address: http://www.ecb.int/home/html/index.en.html

Address of release: http://www.ecb.int/press/pressconf/2006/html/index.en.html