The United States Federal Reserve lifted its interest rates by 0.25% yesterday, in line with expectations.
The European Central Bank is today expected to lift its economic forecasts and discuss whether to keep money at its current ultra-easy level.
The two prominent central banks have different views on the respective economies.
The Fed left its outlook for the coming year unchanged even as its officials projected a short-term jump in US economic growth from the Trump administration’s proposed tax cuts.
In an early verdict on the tax overhaul, Fed officials judged it would boost the economy next year but leave no lasting impact.
The White House has frequently said its tax plan would produce annual GDP growth of 3% to 4%.
The Fed raised its rates to a range of 1.25% to 1.5%, the third increase this year.
The rate increase is a victory for the central bank that has struggled at times to deliver on its promised pace of monetary tightening.
It also allowed Fed chairwoman Janet Yellen, at her final press conference before her term ends in February, to signal an all-clear for the US economy a decade after the start of the 2007-09 recession.
ECB president Mario Draghi is likely to be pushed to end asset buying to stimulate the economy.
Having faced five years of stagnant or falling prices, the ECB has deployed its entire policy arsenal, cutting rates into negative territory, giving banks cheap loans and buying up bonds — all in the hope of boosting growth and rekindling inflation.
The work had paid off. The euro zone recovery is well into its fifth year, thanks to nine million new jobs. Economic convergence between the poor countries such as Italy and Greece, and the bloc’s richest countries, appears to have restarted.
The first clue to future policy would come from the ECB’s new economic projections, which were likely to show better growth for the year ahead.
