The ECB has been offering long term loans to banks at a favorable rate.

After all, a strong economy makes it easier for the ECB hawks to sell rate hikes.

But higher energy prices, by themselves, will not cause the ECB to pull the interest rate trigger.

This would be bad news for the German economy, which could delay possible ECB interest rate hikes.

Indeed, even the markets were fooled, giving the ECB a good grade for its unremarkable rate hike.

(Video) SP ... Prospect theory, hyperbolic discounting, status quo bias, base rate bias.

Further procrastination on interest rate normalization by the ECB could well lead to a nasty bout of inflation.

But the weaker economies get the inflation credibility of the ECB and protection from severe exchange rate swings.

The newest demand, loudly voiced by French President François Hollande, is for the ECB to manipulate the exchange rate.

But then the link between the monetary base and the rate of inflation was severed. From 2005 to 2015, the monetary base soared at an annual rate of 17.8 , whereas the CPI increased at an annual rate of just 1.9 .

French politicians have been the most aggressive in putting political pressure on the ECB to relax its interest rate normalization policy.

However, with the German and US economies slowing precipitously, the ECB would have a perfect cover for its interest rate moves.

At the ECB press conference in early July, Trichet signaled at least one more rate hike either in September or October.

Unless the ECB picks up the pace of interest rate increases now, the goal of interest rate neutrality may not be politically feasible, jeopardizing achievement of the bank s price stability goals.

Since the interest rate set by the ECB is now less than 1 , there is little difference between its current monetary policy and what the Bank of Spain would do if it could set its own interest rate. But when the euro zone starts to recover, the ECB might choose to raise the interest rate before a higher rate would be appropriate for Spain, which could exacerbate Spanish unemployment.

Pressures are mounting on the ECB to raise interest rates and Berlusconi and Co. s attacks are as much as an attempt to forestall future rate hikes as to get the ECB to loosen its monetary policy.

But the ECB has made it clear not only that interest rate cuts are not on the table it is merely postponing, not abandoning, the interest rate increase originally planned for September.

The rate has declined since the base year from 73 to 38 per 1,000 live births.

Examine rate of change of PCGNI in US dollars in nominal terms between two base periods

The Naked ECB

The claim sounded credible until the subsequent survey showed that the area s crude mortality rate had actually risen to six times the normal base rate.

Moreover, from a higher rate level, the ECB would be in a better position to cut rates now that the economy is slowing.

The rate and base of contributions is not identical in all cantons and for all the insured.

But the ECB has signaled that big interest rate cuts are unlikely as long as the German economy remains strong, with relatively low unemployment.

At its most recent policy meeting, the ECB left its policy rate unchanged, citing inflation half a percentage point above the official 2 target.

The ECB Grows Up

Expect more ECB bashing.

European Central Bank (ECB)

At the ECB press conference in early July, Trichet signaled at least one more rate hike either in September or October. Some Council members are known to support two more rate hikes before year end.

SP ... These four things. Prospect theory, hyperbolic discounting, status quo bias, base rate bias. They're all well documented.

At a minimum, the ECB will probably need to match the 1 trillion annual US rate of quantitative easing, and front load much of it.

The ECB could convincingly argue that Merkel s reforms and the US, not its interest rate hikes, are responsible for the European slowdown, should one occur.

No one believed it, and the ECB not only withdrew its clumsy threat the next month, but it adopted a policy of interest rate neutrality.

In the same timeframe, the ECB should move its official rate from 1 to at least 2 , while the Bank of England should aim for 5 .

The base line utilization rate in the above table is 35 per cent, which was close to the utilization rate for the two track adjustment system in May 1994.

Is the ECB Doing Enough?

The ECB and Its Critics

Ecb Is Now Europe s Anchor

Germany s Case Against the ECB

Together, the ECB and the EFSF could do what the ECB cannot do on its own.

b. The additional payment referred to in subparagraph (vi) above shall be made at the rate of twice the aggregate of the staff member apos s net base salary rate.

(c) For 1994 The difference between the weighted average exchange rate used for the 1992 base and the United Nations operational rate of exchange in effect on 1 February 1993

This implies an interval of two months between interest rate moves instead of the three month interval that has become standard ECB practice in the current interest rate cycle. The next rate hike in the normalization process is expected in October, two months after the expected August move.

Helping the ECB Cross the Rubicon

Why the ECB Should Buy American