Editing European Central Bank (section)

==== Effects of the monetary tightening ====
The implementing a of tighter monetary policy has emerged as the eurozone solution to fight the latest inflationary pressure. However, this approach bears the risk of hindering the progress of the economic revival post-[[COVID-19 pandemic|COVID]].<ref name=":7">{{Cite journal |last1=Ider |first1=Gökhan |last2=Kriwoluzky |first2=Alexander |last3=Kurcz |first3=Frederik |title=DIW Berlin: ECB Can Lower Fuel and Heating Costs by Increasing Interest Rates but Would Risk Economic Recovery |url=https://www.diw.de/sixcms/detail.php?id=diw_01.c.838570.de |access-date=2024-01-15 |journal=Diw Weekly Report |date=2022 |language=de |doi=10.18723/diw_dwr:2022-14-1}}</ref> 
[[File:Evolution_of_the_MRO_rate_and_the_HICP_for_the_EU.png|thumb|Evolution of the MRO rate and the HICP for the EU<ref>{{Cite web |last=European Central Bank |date=2024 |title=European Central Bank Data Portal. |url=https://data.ecb.europa.eu |access-date=19 January 2024}}</ref>]]
Raising interest rates is a strategic move by the ECB with specific aims: to decelerate economic activity, stabilize inflation expectations, and steer towards lower inflation levels. Studies have shown that as interest rates rise, the price on the world market does not really change. However, the Euro becomes more attractive to investors, leading to its appreciation against other currencies. This change benefits households paying for gas in Euros, as it translates into lower prices for dollar-traded oil.<ref name=":7" />

On the other hand, the increase in interest rates, while helping to suppress prices, also places strains on the manufacturing sector and the labor market. The aftermath of this shock sees tighter financing conditions and a dip in demand, resulting in a slight uptick in unemployment rates, going beyond 0.1 percentage points. Although the study shows that manufacturing sector quickly rebounds, returning to its pre-shock state within about three months, the impact on unemployment rates lingers for a longer period.<ref name=":7" />