- A year after the US Federal Reserve (Fed) delivered the first hike in a gradual tightening cycle, it raised interest rates a second time, to 0.50%-0.75%. Policymakers also revised up their interest rate projections, and market rates have adjusted higher.
- The European Central Bank (ECB) extended its quantitative easing programme by nine-months and announced it will scale back the monthly pace of purchases from EUR 80 bn to EUR 60 bn. Mario Draghi noted that the ECB retains ability to extend further, as well as increase the pace of purchases, should financial conditions tighten. Modalities of the programme were also altered to broaden the scope of eligible securities.
- The December 4th vote to reject Prime Minister Matteo Renzi’s Constitutional reform bill prompted Mr. Renzi’s resignation and put Italy on track for its 64th government in the last 70 years. The outcome was in line with poll predictions but the margin was much larger than expected. Market reaction has been relatively muted.
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