They Said It - Recent Monetary Policy Comments Made by ECB Governing Council Members

29 July 2022

By David Barwick – FRANKFURT (Econostream) – The following is a compendium of comments made by European Central Bank Governing Council members very directly related to monetary policy’s next steps. We only include forward-looking comments made recently enough to be current. Updates are made on a periodic basis.

This version supersedes the one published on 28 July, to which we have added comments by ECB Vice President Luis de Guindos.


Christine Lagarde (ECB)
23 July 2022

‘We will keep raising rates for as long as necessary to bring inflation down to our target over the medium term. We also recognise that Europe is facing great uncertainty, not least over the war and energy prices. As the economy evolves and responds to the many challenges from outside and within, the Governing Council will review the situation and decide on the right pace for our next steps depending on the incoming data.’

21 July 2022

‘I think if you go back to the monetary policy statement you see very clearly that from now on we will make our monetary policy decisions on a data-dependent basis, will operate month by month and step by step. So what happens in September is going to depend on what data we have for September, but we are definitely on a normalisation path, in order to reach our medium-term objective of 2%. We will determine in September on the basis of the data that we receive - and this is an [ECB staff macroeconomic] projection exercise in September. So on the basis of the data that we receive at the time of those projections, we will determine what step we take on the normalisation path that we are taking in order to deliver on our medium-term 2%. Now, that doesn't mean to say that we are changing the ultimate point of arrival. We are accelerating the exit, and we are following the path of normalisation that we have flagged.’


Luis de Guindos
29 July 2022

‘From now on, we will analyse the situation within the Governing Council on a meeting-by-meeting basis depending on the data we receive. … the main factor that will guide our decisions will be the evolution of inflation.’


Pablo Hernández de Cos (Banco de España)
26 July 2022

‘This 50-basis-point increase brings forward the exit from negative interest rates, but does not imply an increase in the terminal level of the rate path. The pace at which we approach that level will be determined by the data we see in the coming meetings and how they affect our medium-term inflation target of 2%. In other words, interest rate decisions will be taken at each meeting.’

22 July 2022

‘We said that we are data-dependent. This is the verbatim phrase that we have to repeat … until satiety. In September we will see, we will analyse the economic evolution of the next six weeks, of the entire month of August. In September I remind also that we will have new economic projections that for us are very important…’


Joachim Nagel (Bundesbank)
22 July 2022

‘Monetary policy normalisation – and thus also the process of raising interest rates – must continue. The steps we take and the extent to which we raise interest rates will be driven by the data.’


Mārtiņš Kazāks (Latvijas Banka)
22 July 2022

‘I would not say that this was the only front-loading. I would say that the rate increase in September also needs to be quite significant.’

‘Given the uncertainty, given the inflationary dynamics, given the risks of persistence, I would say that of course we should be open to discussions’ about an even larger hike.


Ignazio Visco (Banca d’Italia)
28 July 2022

‘There is a risk of a recession’, in which case the ECB would ‘need to discuss what to do.’

28 July 2022

Refused to say whether September hike would be 25 or 50 basis points, said decision would be based on ‘the developments in prices and in the real economy, because the real economy affects prices. … What we see in the real economy, certainly it is not terribly encouraging.’ Said however that the worsening growth outlook isn’t so bad as to force the Governing Council to abort its tightening plans after September, because monetary conditions remain very loose.

25 July 2022

‘Well, obviously we have decided to take decisions meeting after meeting, so there is no way now to say whether it will be appropriate 50, 25 or whatever. What we have decided was to frontload an increase in interest rate that is basically a normalisation. So, we ended out from the negative interest rates and we will see, depending on data, how to go on, but clearly this does not mean that we are not going to proceed in a gradual way. Graduality means moving step by step, not being very slow.’


Robert Holzmann (Austrian National Bank):
24 July 2022

‘…you can also see the economic development, which hasn't improved as a result of the Ukraine conflict, that there is a risk that the economy will grow less strongly here, the forecasts all point to that. So you have to be a bit careful. If it were just about inflation, we'd probably go even more strongly. Let's see what the economy brings in the fall, then we can probably decide whether to do another 0.50%, or less, or even more. That won't be decided until autumn.’


Olli Rehn (Bank of Finland)
22 July 2022

‘We also stated that breaking away from negative interest rates makes it easier to make future interest rate decisions and to continue the normalisation of interest rates from meeting to meeting. Interest rate decisions will continue to depend on information about the economy, and they aim for the 2% inflation target in the medium term.’


Madis Müller (Eesti Pank)
22 July 2022

‘The central bank's further steps depend on new data and forecasts. We understand that these decisions are expected to mean slower economic growth due to more expensive lending and, unfortunately, uncreated and sometimes lost jobs, but the consequences of persistently too fast price increases would be even worse. At the same time, it is important to understand that even after the central bank's latest decisions, interest rates continue to be favourable for borrowers in historical comparison, especially when looking at the so-called real interest rates adjusted for price increases.’


Pierre Wunsch (National Bank of Belgium)
27 July 2022

Called hiking to 1.5% a ‘no brainer’, absent a ‘deep recession’. Said his preferred course of action given the economic outlook would be to raise rates in half-point increments and then maybe slow down when the deposit rate is closer to reaching 1.5%.


Boštjan Vasle (Banka Slovenije)
22 July 2022

‘Continued normalisation of monetary policy will be appropriate in the future and the exit from the negative interest rate environment allows us to move to deciding on further interest rate changes on an ongoing basis. These will depend on current developments and the analysis presented at each Governing Council meeting.’


Yannis Stournaras (Bank of Greece)
27 July 2022

‘Central banks will raise interest rates as inflation rises, at least until the end of 2023. Then we will start reducing them. Possibly even earlier. If the world economy, and especially the European economy, goes into recession, starting in '23, don't be surprised if we start having central bank interest rate cuts starting in '23, not increases.’


Peter Kažimír (National Bank of Slovakia)
22 July 2022

‘Thursday ended eleven years of waiting for an interest rate hike by the European Central Bank. It is the beginning of a series of similar steps that are necessary and indispensable to tame inflationary risks. How much we raise rates in September and at our next meetings will be determined by economic developments in the euro area and beyond. We can therefore expect a rise of 25 or 50 basis points in September, or, if you like, 0.25 or 0.5%.’