The European Central Bank nudged up interest rates by a quarter percentage point and indicated it will continue to push them higher, sending the euro surging on Thursday.

The ECB’s assertiveness, which took markets aback, stands in contrast to the Federal Reserve’s decision on Wednesday to keep interest rates steady. At a news conference, ECB President Christine Lagarde said officials are unhappy with the outlook for inflation and will continue to raise rates unless economic data change substantially.

Roughly a year into the most aggressive monetary tightening in decades, major central banks are entering a new phase: Rather than unveiling jumbo rate increases month after month, central bankers are fine-tuning their policies, poring over recent economic data to gauge the impact of past rate moves.

Economic growth rates are diverging across countries, inflation is falling at different speeds, and last year’s global spikes in food and energy prices are giving way to more local price dynamics. These changes mean the world’s most important monetary institutions—the Fed and the ECB—are now beginning to diverge in their policies.

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‍Source: CNBC