They Said It About the Policy Outlook - Recent Comments of ECB Governing Council Members

3 March 2023

By David Barwick – FRANKFURT (Econostream) – The following is a compendium of comments made by European Central Bank Governing Council members related to ECB monetary policy. We include only comments made since the Governing Council meeting of February 2.


de Cos (Banco de España)


de Guindos (ECB)


Centeno (Banco de Portugal)


Holzmann (Austrian National Bank)


Kazāks (Latvijas Banka)


Kažimír (National Bank of Slovakia)


Knot (Dutch National Bank)


Lagarde (ECB)


Lane (ECB)


Makhlouf (Central Bank of Ireland)


Müller (Eesti Pank)


Nagel (Bundesbank)


Panetta (ECB)


Rehn (Bank of Finland)


Reinesch (Central Bank of Luxembourg)


Schnabel (ECB)


Šimkus (Bank of Lithuania)


Stournaras (Bank of Greece)


Vasle (Banka Slovenije)


Villeroy (Banque de France)


Visco (Banca d’Italia)


Vujčić (Croatian National Bank)


Wunsch (National Bank of Belgium)


Christine Lagarde (ECB)
27 February 2023

‘Interest rates are the most efficient tool in the present circumstances. There is every reason to believe that we will do another 50bp in March. After that, we will see. We are data dependent. … We will do more hikes if necessary to return inflation to our target of 2% in a timely manner. It will take what it will take. What I know is that we will return inflation to 2%. And we want to not only return it to 2%, but to keep it there sustainably.’

‘We need to raise interest rates to a level that is sufficiently restrictive to return inflation to 2%, and to keep rates there for as long as necessary to be confident that inflation returns to 2% in a timely manner. That's the mantra. Hiking rates inevitably dampens demand. And what we're trying to do is to adjust demand. That's the mechanical impact that we expect from what we are doing. But as I said, it's going to be data dependent. We will assess at every meeting, and we will decide meeting by meeting what we do.’

25 February 2023

On 50bp hike after March: ‘I’m not navel gazing or reading a crystal ball. I want to see the new data and I want to hear the views of my colleagues when they see the same data. It’s on that basis that we will take our decision. But one thing is sure: we want to bring inflation back to 2% in a timely manner. Our decisions will be determined by the incoming data and driven by our goal of returning inflation to 2%.’

On rate cuts in 2024: ‘As I said, I’m not going to predict what monetary policy decisions will be. I’ll wait until our economists project new numbers and we will then analyse very carefully the data that we are given, and we will apply judgement also considering the new data. We have to be confident that inflation returns to 2%. And this has to be sufficiently sustained for us to be confident that we have reached our goal. In the Governing Council’s next monetary policy meeting in March, we will also receive new projections from our economists. Then we will have a new outlook for the economy.’

15 February 2023

‘…at our latest meeting on 2 February we decided to raise the key ECB interest rates by 50bp and we expect to raise them further. In view of the underlying inflation pressures we intend to raise interest rates by another 50bp at our next meeting in March, and we will then evaluate the subsequent path of our monetary policy. Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. Our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.’

‘We are committed to bringing inflation back to our 2% medium-term target, in line with our mandate, and we will take the necessary measures to do so.’

02 February 2023

‘In view of the underlying inflation pressures, we intend to raise interest rates by another 50bp at our next monetary policy meeting in March and we will then evaluate the subsequent path of our monetary policy. … In any event, our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.’

‘I would just remind you that our decision is not the decision for March. We’re taking a decision as of now, which is to raise all three interest rates by 50bp.’

‘…we intend – which is a strong word; it’s not an absolute, irrevocable, unconditional commitment, but it’s a strong word – we intend to raise by 50bp, and that is what was meant in December by this steady pace reference that you find, yet again, in the monetary policy statement. So this has been the continuity. Where we have consistency is consistency with the communication that we had back in December, and with any communication that I have expressed ever since, and it’s totally consistent with the view that we reached in a very, very large consensus today, that it should be 50 this time around, it is intended to be 50 in March.’

‘Now, you will say, “Well, yes, but what about after March? Does that mean that you have reached the pinnacle or the peak?” No. We know that we have ground to cover. We know that we are not done. What we are saying is that, as we will receive projections, we will need to assess what rates, what level, at what pace, are needed in order to do the two things which are embedded in my expression, ‘stay the course.’ The first one is to raise significantly into restrictive levels and stay there for sufficiently long so that we are confident that at those rates we will actually deliver the 2% objective medium-term that we have set for ourselves, and which is delivering on our mandate. Those were the themes that we debated. I have to tell you that there was general agreement on the fact that the 50bp this time around and the 50bp in March were legitimate on the basis of, particularly in March, of the underlying inflation pressure that we know will continue.’

‘…we have all scenarios available to decide that March actually warrants a 50bp increase. This is what we are saying when we say we “intend” to, which is why the word is pretty strong.’

‘Now, you will say, “Is that consistent with the meeting-by-meeting approach?” Let’s call a spade a spade. Meeting-by-meeting is going to be applied on the basis of data, but when we have data that is sufficiently strong, and when we are sufficiently far away from what we expect will be the appropriate rate to reach the 2%, it is completely legitimate to express an intention in a relatively forceful way. An intention is not, as I said, a 100% commitment, but it’s a pretty strong determination, and I can’t think of scenarios, unless they were quite extreme, where that would not happen.’


Isabel Schnabel (ECB)
17 February 2023

‘We are still far away from claiming victory on inflation. A broad disinflation process has not even started in the euro area. If we look at underlying inflation in particular, we are seeing that it is very high and more persistent than headline inflation. Underlying inflation developments play an important role in our thinking.’

‘Given the current level of policy rates and the level and persistence of underlying inflation, a rate hike by 50bp [in March] is necessary under virtually all plausible scenarios in order to bring inflation back to 2%. There is no inconsistency between our principle of data-dependency and these intentions because it is very unlikely that the incoming data is going to put this intention into question.’

‘…it is not so easy to judge whether our measures are already restrictive.’

‘…how long do we need to keep interest rates at a restrictive level? The answer is: until we see robust evidence that inflation — and in particular underlying inflation — is going back to our target of 2% in a timely and durable manner. A turning point in underlying inflation is not sufficient because this turning point is likely driven by the gradual pass-through from lower energy prices to underlying inflation rather than the more persistent components. Over the medium term, inflation will mainly be driven by wage and profit developments.’

To agree to a 25bp hike in May, ‘I would need to see that our monetary policy is becoming restrictive, which should show up in lending markets, in labour markets, and in the various aggregate demand components.’

10 February 2023

‘…we will stay the course in raising interest rates to bring inflation back to our 2% target in a timely manner.’

‘Our policy rates have gone up by 3 percentage points over the past seven months. And we still have ground to cover.’

‘Our decisions will be based on incoming data.’

‘We cannot yet claim victory in taming inflation. That’s why we need to stay the course and raise rates significantly further. Whether another 50bp hike is needed will depend on incoming data and our assessment of the inflation outlook.’

07 February 2023

‘At the same time, we have announced that we intend to raise the key interest rates by 50bp in March as well. And the question is, of course, what happens after that. And in principle, we have to answer two questions. The first question is, how high do we actually have to go? So what does it mean for interest rates to reach a sufficiently restrictive level? And to decide that, we ultimately have to assess whether monetary policy is actually working. So far, we see very little of that. In the meantime, we are seeing a tightening in the credit market, in credit conditions and now also in credit volumes, but we cannot yet see that monetary policy is actually taking effect to such an extent that we can hope that inflation will return to our inflation target of 2% in the medium term. This means that we will look very closely at what is happening in the labour market, what is happening with investments, what is the general economic development. The second question we have to ask ourselves is how long do we have to stay at this restrictive level?’


Philip Lane (ECB)
28 February 2023

‘Our assessment of December remains solid, that we needed a sequence of 50bp hikes to bring us inside a zone where we would need to think harder about whether rates are sufficiently restrictive to deliver the return of inflation to 2%. The data flow since then suggests that the assessment is solid, that we need another 50bp in March. Then there are three criteria for what happens after that. One element is our inflation projections, and here I mean the whole path, not just the end point. The second is progress in relation to underlying inflation, and the third is an assessment on how powerfully and how quickly monetary tightening is working. With regard to the forecast, it’s about the cumulative deviation from the target. Any deviation from the target is costly in terms of delivering on our mandate. So the larger and the longer the material deviation from 2% is, that is significant, in addition to the forecasted speed of convergence to our target. On underlying inflation, we also need to look at actual outcomes, because forecasting techniques are limited, which is even more true now, given the volatility and the shocks we’ve seen. So we’re all signed up to the criterion that sufficient progress in underlying inflation is important. The issue is how to interpret that criterion.’

‘We expect to get our policy rate to 3% in March, and according to a wide range of ways of thinking about it, that’s a restrictive level.’

‘Let me differentiate between two risk assessments. One, the most important one, is what is the risk to our inflation target of 2%? I think the risk remains skewed to the upside. We look at scenarios, such as whether inflation expectations get de-anchored or a wage-price spiral gets embedded. You can definitely come up with plausible scenarios for inflation that doesn’t come back to 2% quickly enough. The scenarios where inflation falls below 2%, you can put some weight on them. But that’s fixable in the sense that if the inflation dynamic weakens more quickly, then we can adjust. But in the upside scenario, where inflation doesn’t come back quickly enough, then the longer it remains high, the more it becomes normalised, and then we have a significant problem.’

16 February 2023

‘…we have also signalled that we intend to raise the deposit facility rate by another 50bp at our March meeting and we will then evaluate the subsequent path of our monetary policy. This evaluation will necessarily turn on two basic considerations: first, an updated assessment of the medium-term inflation outlook (both the modal path and the risks to this outlook) second, an updated assessment of the appropriate monetary policy stance to make sure that inflation returns to our 2% target in a timely manner. In turn, both parts of this assessment involve judgements on the impact of the monetary policy adjustments that have already occurred since December 2021.’

‘…our monetary policy actions are clearly tightening financial conditions, reducing credit volumes and altering the behaviour of households and firms. At the same time, much of the ultimate inflation impact of our policy measures to date is still in the pipeline. Over time, our monetary policy will make sure that inflation returns to our target in a timely manner. But I have also listed some of the sources of uncertainty about the transmission mechanism that call for an open mind about the precise scale of the monetary policy tightening that will be needed to achieve this outcome. Furthermore, as indicated in the introduction, the calibration of the monetary policy stance needs to be regularly reviewed in line with the incoming information about underlying inflation dynamics, especially in the context of the remarkable shocks that have hit the euro area and global economies over the last couple of years. The Governing Council’s data-dependent, meeting-by-meeting approach to setting interest rates is well suited to facilitating the necessary ongoing analysis of these issues.’


Luis de Guindos (ECB)
08 February 2023

‘We increased our policy rates by 0.5 percentage points last week, and will very likely raise them by another 0.5 percentage points at our next meeting in March. We will then see what we will do. I would not rule out further rate hikes after March. The battle against inflation is not over yet.’


Fabio Panetta (ECB)
16 February 2023

‘…the ECB should not unconditionally pre-commit to future policy moves. Instead, we need to calibrate our monetary policy in a way that is data-dependent, forward-looking and adaptable to changing developments. This approach can be best implemented by providing clarity on our monetary policy reaction function and then being guided by that reaction function in our decisions. We should respond to incoming information on the medium-term inflation outlook and the balance of risks surrounding it. And we should keep our policy tight until we see inflation firmly converging back to 2% over our policy horizon, taking into account the lags with which our monetary policy operates. When we were normalising rates the pace of adjustment was key. But with rates now moving into restrictive territory, it is the extent and duration of monetary policy restriction that matters. By smoothing our policy rate hikes – that is, moving in small steps – we can ensure that we calibrate both elements more precisely in the light of the incoming information and our reaction function. This framework will allow us to return to our target without undue delay. And it will allow us to do so at minimal cost to the economy and employment, reducing the risk that we tighten too much.’

‘…we increasingly need to consider the risk of overtightening.’

‘…as policy rates move more firmly into restrictive territory and the energy shock abates, the risks to the inflation outlook have become more balanced. And the outlook for the economy and inflation has become increasingly uncertain, both globally and in the euro area. In this environment, we no longer need to overweight upside risks to avoid worst-case scenarios. We now need to take into account the risk of overtightening alongside the risk of doing too little. A data-dependent calibration of monetary policy – firmly rooted in a clear reaction function – offers the best way forward. It will enable us to clarify our policy intentions, providing markets with the necessary guidance while keeping volatility in check. In parallel, by smoothing our policy moves we ensure that their cost to the economy is minimal. This doesn’t mean we will not be resolute in the fight against inflation. It means being resolute in the right direction.’


Joachim Nagel (Bundesbank)
16 February 2023

‘…in a situation like this, we have to be much more persistent in monetary policy in order to get a grip on inflation.’

‘I have already pointed out in various places that our work is far from done, there is still a long way to go. We know from past episodes that it was always a cardinal mistake to let up too early on the part of monetary policy in such a phase; in my view, this mistake should not be repeated.’

‘[I am] completely behind what Ms Lagarde indicated for the March meeting - a clear, robust interest rate step must certainly follow.’

‘From today's perspective, I don't see inflation rates, especially core inflation rates, declining so much that this path would already be over after March; there will still be a lot to do.’

‘From today's perspective, I don't see that we are in restrictive territory. I can't tell you yet where restrictive territory will be. That will clearly depend on how the new projection figures look and how we come into the next meeting.’

09 February 2023

‘‘A cardinal rule of monetary policy is that one does not let up too soon, and I would like to see such an error avoided in the Eurozone.’

‘At the moment, everything indicates ... that we still have a ways to go.’

08 February 2023

‘…we already announced an interest rate increase of another 50bp for March. This is a strong commitment to a consistent monetary policy. However, as things currently stand, I do not see our job as being done yet with the interest rate move in March. I believe that we must also raise rates even further in order to create the necessary drag to bring inflation back down to 2% in a timely and sustainable manner. If we let up too early, there is a great danger that inflation will become entrenched. In March, we will know more about where exactly to go from here. Then we will have new data and the new ECB staff projections.’

‘From my current perspective, further significant interest rate increases will be needed. However, I think our step-by-step approach is the right one – for there are many unknowns.’

‘I would strongly recommend interpreting the latest statement as what it is: a robust announcement that goes beyond the March meeting. We are still far from having achieved price stability; our job is not done yet.’


François Villeroy de Galhau (Banque de France)
01 March 2023

‘…the first figures for February published yesterday for Spain and France call us to be vigilant, and to persevere in our monetary action: inflation persists, for France at 7.2% in European harmonized index, 6.2% in the national index. According to our forecasts, it should reach its peak in this first half and could have halved by the end of the year. But this is still too much, and “underlying” inflation, excluding energy and food, continues to rise, we estimate it at 4.5% in France. Inflation has indeed changed in nature beyond the original energy crisis: it is not only higher but wider, not only imported but also domestic, not only linked to a temporary supply shock but potentially persistent. Consequently, no one can any longer deny that monetary policy can react, and must react. I strongly reiterate before you not only our forecast, but our commitment to bring this inflation down to 2% by the end of 2024 - end of 2025. After the “sprint” of monetary normalization started in July 2022, we are now entering a new phase of monetary policy more comparable to a long-distance race: it will be longer – above all, we must not declare victory too quickly –, but more gradual and more pragmatic in the rhythm of the next increases. It is clearly too early to say, beyond the 3% that we will reach in March – much lower than the current 4.75% American, or the 4% English – the "terminal" rate at which the key rates will stabilize. But I believe it is possible to illuminate the path that I believe we should follow, to provide some economic predictability. First of all, on the calendar, it seems desirable to me to reach this terminal rate by the summer, that is to say by September at the latest. And our decisions will be guided by economic data: our central criterion for monetary stabilization should be the reversal of the underlying inflation trajectory deemed fairly safe, which best "informs" the medium-term outlook for the headline inflation, and which monetary policy can best address. We are not yet at this reversal, this economic “threshold”. I also want to dispel a fear: the disinflation that we are going to carry out will not lead to recession, given the resilience of activity and employment. On the contrary, it is a lasting inflation which would be the worst enemy of growth.’

22 February 2023

‘There has been an excess of volatility on terminal rate expectations. In other words, the markets have overreacted a bit since Thursday.’

‘We will in no way be forced to raise rates at every Governing Council between now and September. We are already in restrictive territory with a deposit rate at 2.5%, let alone when it reaches 3% in March.’

17 February 2023

‘We are now entering a new, slower, longer and more open phase. After the sprint comes the long-distance run. Expectations are continuing to focus, excessively in my view, on our speed: are we going to continue our 50bp hikes after March? I shall not answer that today, first because our decisions over the coming months will be guided by the data. Above all, it is also because there are two more important variables in this new phase: the level of interest rates that we reach, and the duration for which we stay there. Regarding the level, the markets’ estimate of the “terminal rate” was, until the last few days, around 3.5% in the euro area. The fluctuations since yesterday may be excessively volatile, but I shall just make one comment here on the calendar and another on the substance. Regarding the calendar, without setting ourselves any strict time limit, I think it is possible that we will have reached this peak by summer... which officially ends in September. That would leave us four Governing Council meetings, after the one in March where we will have reached 3%. We shall probably go beyond this 3%, but there will be no obligation to act automatically at each Council meeting, and we are not ruling out acting subsequently if new elements justify it. This gives a sufficiently broad scope of action to be serene, open: after March there will be less monetary urgency as we will need to analyse the economic evidence more closely.’

‘What economic data should guide us in deciding whether or not to stop the rate hikes? In my view, the central criterion is a turnaround in the trajectory of inflation, not just headline inflation – we are very probably close to that point – but above all underlying inflation, notably excluding energy prices – which may lag the headline measure by several months. It is this underlying inflation that monetary policy can best treat, and which provides the best indication of the medium-term trajectory of headline inflation. Will this turnaround require actual and duly observed falls in underlying inflation, or a sufficiently solid forecast of an expected fall in the very near term? Prudence demands the first response, while the time taken for monetary policy transmission justifies the latter, so the Governing Council will have to use its judgement. … The other key variable is the duration the interest rate is kept at its so-called terminal level. It is our duty to repeat that the fight against inflation cannot be won without perseverance, and without keeping interest rates high for as long as necessary. We need to be wary of declaring victory too soon: the final kilometres of a long distance race are often the most decisive. Here again I think we can give some pointers on this other essential “lock”: what economic data could guide us as to the length of this phase and lead us to one day envisage a lowering of the level of rates? This issue is of course further off in the future, and definitely not for this year. However, when the time comes, we will need to find the optimal balance between the level at which rates are stabilised, and for how long, as in a long distance race where you need to balance pace and distance. When we are sufficiently confident that we have reached the right rate level, it might be a good idea to give guidance on the criteria determining how long we stay there. The key criterion here seems to me to be a return to an inflation outlook that is compatible with our 2% target, firmly and durably. Firmly in the sense of being supported by actual data on headline inflation but also on underlying inflation. Durably in the sense of being well ahead of the end of our projection horizon, and including, in my view, a decline towards 2% of households’ and businesses’ inflation expectations.’


Ignazio Visco (Banca d’Italia)
01 March 2023

‘There is no question that the tightening of the euro area monetary stance must continue to ensure that a temporary increase in inflation caused by a supply shock does not become a more persistent phenomenon sustained by demand factors. … the pace of any further rate hike will continue to be decided on the basis of incoming data and their impact on the inflation outlook. It will remain essential to continue balancing the risk of a too-gradual recalibration (doing too little), which could cause inflation to become entrenched in expectations and in wage‑setting processes, with that of an excessive tightening (doing too much), which would result in significant repercussions for economic activity, financial stability and, ultimately, medium-term price developments. In line with our symmetrical price stability objective, I believe that equal weight should be given to both risks.’

‘In the face of both of these risks, the central bank decisions should continue to be characterised by wisdom and balance and be guided by careful quantitative evaluations of incoming data.’

26 February 2023

‘…if the sources of the increasing inflation recede, then really … we should expect that prices follow, non-energy prices. If they don't, then this calls for monetary policy being very attentive’

‘In March it’s not an expectation, it’s our indication. We use that word exactly for that. It is data dependent. So, in this sense, we have to really be cautious before we say anything, and this is why we basically state the decisions are going to be taken meeting by meeting. We gave an indication for this second meeting because … [w]e have to be sure that core inflation is not remaining at this high level. There are a number of reasons why it is there. One of them … had to do with the lags with which prices of manufactured goods and services follow the increase in energy prices. But also, there is a demand issue in the labour markets, which are very heterogenous across the area, but in some important ... countries, they really are pretty tight. And so, this may induce wage increases beyond what is compatible with a … medium term 2% inflation rate, which is our target. So, this is why we are … observing these with a lot of care. … but I'm not worried.’

‘I don’t think that we can indicate now what the terminal rate is. Not even if it will be 3.5%, 3.25%, 3.75%, because really, it is data-dependent. This said, I believe that so far, we don’t have to worry. We were … in a negative region as far as real rates were concerned. If you look now at a year ahead, or five years ahead, real rates, we are around zero. There is nothing to be worried about with real rates around zero.’

‘Our objective is to go back to an inflation rate of 2% in the medium term. If we need to be more restrictive, we’ll be more restrictive. What I'm pointing out is that I don't think that we should be excessively worried and worrying the markets and worrying … the economy at large … having a very tough face. I think we have to be very realistic. So, if it would be needed, we are there and we will move interest rates where they are. “Significantly” is … a term which has a number of meanings. My meaning is “determined” in this sense. Not “large”.’

11 February 2023

‘There is no question that the restriction of the euro area monetary stance must continue to ensure that a temporary increase in inflation caused by a supply shock does not become a more persistent phenomenon sustained by demand factors. … Following the ECB Governing Council’s latest decision, the pace of any further rate hike will then continue to be decided on the basis of incoming data and their impact on the inflation outlook. It will also remain essential to continue balancing the risk of a too gradual recalibration, which could cause inflation to become entrenched in expectations and in wage‑setting processes, with that of an excessive tightening, which would result in significant repercussions for economic activity, financial stability and, ultimately, medium-term price developments. In line with our symmetrical price stability objective, equal weight should be given to both risks. In particular, I am concerned about statements that seem to give a (much) higher weight to the risk of doing too little.’

‘I have argued that the extreme uncertainty we are living through today must inevitably imply, for the time being, a continuing tightening of monetary policy to avoid the possibility of relevant second-round effects reverberating across the euro area. However, this same uncertainty also suggests we move gradually and prudently, with official rates continuing to rise in a progressive but measured way, on the basis of the incoming data and their use in the assessment of the inflation outlook. I also believe that we should be very careful in providing a quantitative evaluation of the effects of preferring one or the other of the two opposite risks of doing too much or too little. It seems to me that there is no reason a priori to prefer erring on the one side or the other.’


Pablo Hernández de Cos (Banco de España)
15 February 2023

‘…I can conclude that, at the time of our February meeting, the risk-free forward curve – together with all the other factors influencing markets’ and experts’ inflation expectations – could be seen as compatible with a return of inflation to the 2% target in the medium term. And we acted and communicated in accordance with this assessment. First, we reiterated our determination to stay the course of raising interest rates significantly at a steady pace and keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2% medium-term target, in a manner consistent with our December communication. Second, we approved a 50bp rate hike that had already been discounted by the market. Third, we announced our intention to raise rates by another 50bp in March, again, as widely expected. Fourth, we indicated that we will evaluate the subsequent path of our monetary policy in March. Indeed, two weeks after our February meeting, financing conditions remain at levels that are very close to those observed before that meeting.’

‘Our February announcement stopped short of providing specific indications about our policy intentions beyond March. At our March meeting, we will benefit from a new round of ECB staff macroeconomic projections, including a comprehensive reassessment of the euro area inflation outlook. We will then be in a better position to judge the most appropriate policy path, in a manner consistent with our data-dependent approach.’


Klaas Knot (De Nederlandsche Bank)
08 February 2023

‘…the direction of travel therefore remains up. The Governing Council will stay the course in raising rates at a steady pace and in keeping them at levels that are sufficiently restrictive for a timely return to our 2% medium-term target. This reduces inflation by dampening demand and guarding against the risk of an upward shift in expectations. Our decisions will continue to be data-dependent and follow a meeting-by-meeting approach.’

‘The Governing Council is convinced that, under a wide range of scenarios, rates need to go up further to restore price stability. That is why it is possible for us to communicate some assessment of the policy rate path that lies ahead of us; specifically the intention to hike by another 50bp in March.’

‘…major and/or abrupt changes to the inflation outlook might always lead to a different policy decision at any upcoming meeting. The guidance that we extend is conditional and reflects an assessment based on contemporaneous information. It is a conditional baseline. By extension, the rate path beyond March is more uncertain. At this point, as we still have quite some ground to cover, I consider it highly unlikely that the March hike will be our endpoint. And if underlying inflation pressures do not materially abate, maintaining the current pace of hikes into May could well remain warranted. At the same time, the farther policy rates are edging into restrictive territory and the stronger the cumulative impact of our tightening will be felt, the more important it becomes to fine-tune our actions. Once we see a clear and decisive turn in underlying inflation dynamics, I therefore expect us to move to smaller steps. But absent such a turn, the ECB will continue to stay the course on its steady pace upwards, in pursuit of price stability for all euro area citizens.’


Pierre Wunsch (Belgian National Bank)
02 March 2023

Terminal rate ‘depends very much on the evolution of core inflation.’

‘If we don’t get clear signals that core inflation is going down, we will have to do more.’

[L]ooking at rates of 4% would not be excluded. But I want to insist, I won’t make any judgment on where rates would have to go without seeing developments in core inflation.’

03 February 2023

‘I don't think we're going to move from 50bp [in March] to zero. It might be another 50bp or we might be moving to 25. I will certainly not exclude another 50bp, but that's going to be dependent on the data.’


Mārtiņš Kazāks (Latvijas Banka)
09 February 2023

‘Of course, we as decision makers should be open to discussing alternatives. But given the inflation and economic dynamics so far, the fact that we are only at 2.5% and that the pro-cyclicality and latent nature of r* make it very difficult to be sure that we are already in restrictive territory, getting to 3% in March is a good choice that will be effectively transmitted and, in my view, will take us into restrictive territory. But it is by no means the end of the cycle. I see no reason to stop or pause at 3%. Rates will need to go up at further meetings. How far exactly will depend on the data.’


Olli Rehn (Bank of Finland)
20 February 2023

‘We must not let up too early. … We must preventively and continuously raise our interest rates in order to keep inflation expectations under control and prevent a wage-price spiral.’

‘With such high inflation, further interest rate hikes beyond March seem likely, logical and appropriate. It is hard to imagine that we will stop raising interest rates as long as the core inflation rate continues to rise and is so high.’

The terminal rate would be reached ‘over the course of the summer’. Rates are not yet restrictive and the ECB must ‘not be too hasty in discussing interest rate cuts.’

07 February 2023

‘Although the price of energy has decreased recently, the underlying inflation in the euro area is still high. The task of monetary policy is to stabilize inflation to our goal of two percent in the medium term. This requires monetary policy to be tightened to a level that limits demand sufficiently and keeps inflation expectations in line with our target.’

‘We have also made it clear that the rise in interest rates will probably have to continue. Future interest rate decisions will continue to be based on the latest information on the economic outlook, and decisions will be made on a meeting-by-meeting basis. The tightening of monetary policy is reflected in the rise of market interest rates.’

‘We prefer to tighten monetary policy consistently and thus keep the price-wage cycle under control. The near-term economic development may be slightly more subdued due to the rise in interest rates, but the risk of a long-term economic crisis is lower when inflation is stabilized.’

03 February 2023

‘We also told you yesterday that we are going to raise interest rates by half a % unit at our March meeting. At the same time, we evaluate the future career of the key interest rate in the light of the latest information, i.e. our March forecast.’


Madis Müller (Eesti Pank)
03 March 2023

‘…we as central bankers, we just should not hesitate. I’m not saying that anyone is hesitating right now. But as a principle … given the inflation outlook, also the fact that … yesterday’s February number for core inflation again went up a little bit, and that these underlying pressures for inflation are still so strong, it really is important for the central bank also to act and make sure that we get in a reasonable time back to 2% with the average inflation.’

‘In terms of the terminal rate, I just cannot tell you. I don’t think … anyone can really tell you, and … we should just wait until … we see that there really is a trend, also a downward trend in core inflation consistent with what we want to see in terms of the 2% inflation target. But when exactly that will … take place and when will we see it and how far we need to … still hike interest rates, I think just time will tell. We need to see how the decisions we have taken so far will gradually work through the economy. … At the end I think we need to be data-dependent, of course not only looking at the past data, but also try to evaluate the outlook … and see if looking forward, we are on the right path.’

03 March 2023

'Headline inflation started to come down towards the end of last year, mainly thanks to a decline in energy prices, and it fell to 8.5% in January. More worrying however is that core inflation has remained persistently high at more than 5%, as the underlying price pressures are not yet receding. The ECB Governing Council consequently announced last month that it will continue to raise interest rates and keep them high enough to bring inflation back to its target of 2% in the medium term. We also indicated that we intend to raise interest rates by another 50bp at our next monetary policy meeting in March. It is most likely this will not be the last rate rise in this cycle, and it is quite possible that interest rates will need to stay high for quite some time so that we can be sure that inflation will come back to, and remain at, close to 2%. Central banks need to focus on second round effects from inflation, and prevent large but temporary price surges, like those we have seen in very volatile energy and food prices, passing through into other prices, labour costs and inflation expectations. If they do, they could cause a wage-price spiral, which would then stop inflation from falling back to its medium-term target level after the temporary shocks have faded. The ECB has to continue to act ‘until we are confident that inflation will be brought back to its target in a lasting, sustainable manner.’

'I don’t see that [a wage-price spiral] happening right now.'

‘More worrisome [is high core inflation], as it indicates the presence of more persistent inflationary forces that can be more difficult to break.'

03 February 2023

‘Based on current knowledge, it is also clear that there will probably be an equally large interest rate increase in March. This is necessary in order to break the backbone of the too fast price increase and overcome the naturally more persistent pressures that are still raising the price level.’


Boštjan Vasle (Banka Slovenije)
03 March 2023

‘With headline inflation remaining high and core inflation even increasing, our intention is to raise interest rates still further. My expectations are that the increase we intend for our March meeting will be followed by additional increases before we reach a level which will be sufficient to bring inflation back to the trajectory towards our goal of 2% inflation. And also continue reducing the size of our balance sheet further after the initial step we made this month, when we started to reduce the amounts of asset holdings by €15 billion per month. I strongly believe that our determined action will contribute to lower inflation in the euro area.’

03 February 2023

‘Given the persistence of inflationary pressures, we expect to raise rates again by 50bp at the next Governing Council meeting in March. Interest rates at restrictive levels will eventually reduce inflation by dampening demand and reducing the risks of strengthening inflation expectations. However, we will continue to adjust further monetary policy decisions to the circumstances and expectations at the time.’


Yannis Stournaras (Bank of Greece)
16 February 2023

‘…the latest data [are] showing a visible deceleration in inflation and a slight strengthening of economic activity, allowing for greater optimism, both in relation to the last official Eurosystem forecasts in December, and the possibility that hikes in key ECB interest rates to a level likely to cause a "hard" landing of the eurozone economy would eventually be needed to tame inflation. The ECB's next moves will depend mainly on the dynamic course of inflation, as reflected in its March forecasts.’


Peter Kažimír (National Bank of Slovakia)
03 February 2023

‘In March, we intend to continue the established rhythm and raise rates again by 50bp. March will also be the month when we will have updated forecasts on the expected development of the economy and inflation for this and the next two years. It will be a moment for me to start talking about what to do next. Assuming that the March and subsequently June estimates show a drop in inflation towards the target, we can begin to cautiously say that we are managing to tame the inflationary beast. I think the March increase will not be the last. We will decide how many more will be needed afterwards. While we continue to raise rates, the financial markets have already started speculating about when we will start cutting rates. However, we are not at the top yet, and I think we won't be there in March either. At the same time, I would like to repeat that we will remain at that peak. We will stay there until we are sure that we can start the descent with a clear conscience. In translation, we can start reducing rates.’


Mário Centeno (Banco de Portugal)
13 February 2023

‘We declared that intention in March to hike 50bp. We will have a new forecast. It's going to be very important for the continuation of monetary policy by the ECB. We need to be open minded with data, because we stated that we will decide meeting by meeting and being data-dependent. We have inflation going down, actually faster than we expected in December when we produced the previous forecast. It will continue to go down as long as we don't have further shocks in our economies. So, this is good.’

‘After that [March], we will need to see the data. We need to be open to all possibilities, I would say, because that's what is most important for us, is that inflation keeps going down. We have good signs of that recently, the inflation surprised us in the downside for the first time in many, many years. That's great for … Europe. We need to continue that way. And hopefully we can be more predictable, as long as these trajectory of inflation is set.’

‘We really need to see inflation converging to 2% in the medium term, and the medium term is ‘24-‘25. If we are close enough to that target in our forecast, we can certainly pause this process of hiking. But let me be quite precise. What is important to everyone when they look at the monetary policy of the ECB is that, our interest rate needs to converge at some point to what we call the natural rate, and we will do it, because that's the nominal anchor that we need in monetary policy. And I think we have it in sight.’

‘My expectation is that March will be very important to define exactly that moment [the terminal rate], because the new forecast is going to tell us exactly where we are in this process and we for sure are much closer to that terminal rate than before. We are we are approaching it. And I think March will be a great moment for us to be very clear about it.’


Gabriel Makhlouf (Central Bank of Ireland)
14 February 2023

‘You should expect us - certainly I’m open to - to continue to take forceful action to see monetary policy ultimately deliver on our target.’

‘We’ve announced our intention that there will be a further increase in our policy rates at the March meeting; I expect us to continue to increase rates after our March meeting.’

‘…with the amount of uncertainty that exists in the macroeconomy right now, I’m not going to predict when we’re going to stop. But we’re going to stop when we feel that the actions we’ve taken are going to deliver our 2% target on a sustainable basis.’

14 February 2023

‘I see the ECB as putting up interest rates after the March meeting … Even though inflation is coming down, it’s still way above our target.’

‘I could see it [the terminal rate] being higher than 3.5%. I’m open to acting forcefully to get inflation down to our target.’


Gediminas Šimkus (Bank of Lithuania)
03 February 2023

‘March is an intention but not a commitment. If we are talking about May, we can certainly expect it.’

‘There are some corrections of inflation expectations to the positive side. I think this shows very clearly that we are on the right track. And it is these forecasts that will help us make a decision in March.’


Robert Holzmann (Austrian National Bank)
06 February 2023

‘…current inflation rates in the euro area remain too high. Most importantly, people clearly continue to feel the impact of inflation on their daily lives. Hence, today, the risk of overtightening seems dwarfed by the risk of doing too little. So, I think I may consider myself at least partly “Lámfalussyian” when reaffirming the following: Our monetary policy must continue to show its teeth until we see a credible convergence to our inflation target – a convergence that is also felt by the wider public.’

03 February 2023

‘Interest rates have risen, but are still at a comparatively moderate level. We are now at 2.5% with a headline inflation rate in Austria of over 10% and over 8.5% in Europe, so we are still some time away from where we can stop raising rates.’


Boris Vujčić (Croatian National Bank)
27 February 2023

‘Now I would say we are about to get into a restrictive territory. Probably [rates now are] not yet restrictive. Particularly given that we are now operating in the floor system.’

‘I think that markets are right to price this 50bp’ in March. ‘And for May, June, July … for the summer, we will see. We have to wait for the data. As I said, we will be doing it meeting by meeting. And when the data come in, we will decide what to do.’

‘Our job as I always say is to explain what are we looking at for the markets to understand our reaction function, but not necessarily to communicate where the terminal rate is, particularly because I don't think anybody at this point really knows it. We've seen so many surprises with the inflation data before. We know how the models predicted the inflation. So, let's wait and see. As we get new data, we will decide.’

‘I always say we have to look at both. Obviously, the target is headline. But we have to look at the core, because this is where the underlying inflation pressures will be. Headline will come down, as I said. We might get into a situation where headline comes under the core, which will be then a challenge for a communication. But as long as the core persists at the levels that we are talking about, and this is significantly higher than our rates are and significantly higher than where our target is, we should persevere and we should really bring it down to the levels where we need it to be in the medium term.’

‘I would say that we're already seeing the impact [of our tightening] in the system. The main transmission channel, particularly in Europe, are the credit markets. What we've seen there is that the mortgage market is already feeling it strongly. You've seen a drop in demand, which is significant. We see some things in the corporate sector, loans for corporates. But we, I would say, need to wait for further data, because there were some one-off effects in the last quarter, particularly in Germany when it comes to the corporate lending, some repayments of loans, which reduce it. But let's see now with the new bank lending survey and the new data on loans in the first quarter, we'll get a better feeling how much the tightening is affecting the corporate sector. But I would say that what we've seen already in the mortgage market is welcome, because if there was one segment of the market where you saw a lot of froth, that was definitely mortgage markets, and macroprudential measures that were widely used recently had little chance to deal with it as long as the rates stayed as low as they used to be.’

10 February 2023

‘I think the message from the meeting was quite clear: We will raise rates by another 50bp in March, barring some unexpected data surprises. After that, we’ll be looking at the data that come in the following months and decide on the interest rate moves then. The decision is not really different from what we said in December.’

‘Given where we are today, I would agree that we are likely to see more rate action beyond March. But we're going to wait for the data to come in and then decide in May, June, July what we’re going to do.’

‘…from where we are now, given recent data and our projections, we are likely to see more rate action beyond March and I would leave the issue of the terminal rate for later.’


Gaston Reinesch (Central Bank of Luxembourg)
01 March 2023

‘In view of the underlying inflation pressures the Governing Council intends to raise interest rates by another 50bp in March and will then evaluate the subsequent monetary policy path. It is true that energy prices have dropped significantly and feed into lower headline inflation. On their own, however, substantially lower energy prices are currently no reliable indicator when assessing the medium-term outlook for price stability. Reflecting a partial reversal of the supply-side shock the euro area faced in 2022 as well as base effects going forward, energy price developments blur the signal of headline inflation for the medium-term inflation outlook in the coming months. And while the momentum of price pressures has weakened more recently also for non-energy items, it stands to reason that consumer prices continue to rise fast and that inflation remains far above the medium-term target (for some time). … Measures of underlying inflation are of particular importance in periods of substantial supply-side shocks and significant base effects. Once these shocks and effects unwind, headline inflation should adjust to levels determined by underlying inflation pressures, which are mainly determined by wage and profit developments which, in turn, depend – among others – on inflation expectations. Depending on the medium-term inflation outlook, it cannot be excluded at all that more ground may need to be covered after the Governing Council monetary policy meeting in March with a view to reduce inflation over time and to guard against the risk of an upward shift in inflation expectations. Any further steps, whether in continuation of the current pace or at a different pace, will be taken accounting for - among others - the March 2023 ECB staff projections and an assessment of the dynamics of underlying inflation and will be motivated by the firm determination to reach the medium-term inflation target in a timely manner.’