Period of negative rates ends as ECB takes drastic action

Having experienced a long period of negative interest rates since the summer of 2014, the European Central Bank has suddenly increased its rates more than expected – a 50bps increase, not the rumored 25bps rise – stating the increase is justified in the face of the current economic climate. The ECB has also launched its anti-fragmentation tool, which is set to prevent bond spreads from widening too far.