ECB's guidance on rates calms Fed-induced fears
When the European Central Bank maintained its key interest rates at record lows last week, as expected, it also sent a far bigger message: that a central bank revolution was under way.
The governor of the ECB, Mario Draghi, felt compelled to spell it out to reporters at his regular monthly news conference.
"You haven't really listened very carefully to my statement," Draghi scolded a journalist.
"The governing council has taken the unprecedented step of giving forward guidance in a rather more specific way than it has ever done in the past.
"The governing council expects the key ECB interest rates to remain at present or lower levels for an extended period of time."
In the world of central banking, where a governor's every word is weighed and pored over by analysts, the comments were dynamite.
Stock markets across Europe rallied strongly, and the euro fell against the US dollar.
After 15 years of saying it will never "precommit" to future interest rate moves, the ECB was giving an assurance that interest rates would not rise for quite some time.
Less than an hour earlier, the Bank of England's new Canadian governor, Mark Carney, had rung in a mini-revolution of his own.
In a much more coded statement, Carney, who had been in the job barely a week, said that market expectations of rate rises in 2015 were "unwarranted".
Draghi was at pains to point out there was no co-ordination between the statements.
But central bank watchers see them as a response to the US Federal Reserve, which triggered renewed tensions in the financial markets recently by hinting that the prolonged period of easy money is coming to an end.
Financial markets were spooked by the announcement last month that the Fed was preparing to phase out its bond buying, or so-called "quantitative easing" loose monetary policy.
Political turmoil in Portugal had sparked concern at the prospect of a new flare-up in the euro-zone crisis.
In response, interest rates on sovereign debt have risen across the euro zone and in emerging markets, and financial conditions have tightened.
Analysts at UniCredit said: "The ECB and the BOE are answering back."
At Commerzbank, Rainer Guntermann said: "European central banks are starting to fight the Fed. The ECB is rewriting history."
Ishaq Siddiqi, a trader at ETX Capital, said the ECB and the Bank of England would cool market volatility, because now "investors will not have to speculate that the central banks will raise rates any time soon".