Given improving conditions in the market and economy, the European Central Bank said stimulus measures implemented to fight off the worst recession since the Great Depression would be withdraw gradually. Meanwhile, the fragile situation still merited a 1% interest rate, which has stood still since May.
From the WSJ:
“The improved conditions in financial markets have indicated that not all our liquidity measures are needed to the same extent as in the past,” Mr. Trichet said. He stressed the bank would “gradually phase out” the programs.
The decision by the governing council to begin curbing stimulus measures was reached, Mr. Trichet said, by “consensus,” ECB code for a decision that wasn’t unanimous. Unlike the Federal Reserve, the ECB doesn’t announce vote counts or dissents and doesn’t publish minutes.
The Fed’s beige book released this week sees improving recovery though rebound remains subdued. From the Fed’s beige book:
Reports from the twelve Federal Reserve Districts indicate that economic conditions have generally improved modestly since the last report. Eight Districts indicated some pickup in activity or improvement in conditions, while the remaining four–Philadelphia, Cleveland, Richmond, and Atlanta–reported that conditions were little changed and/or mixed.