They Said It - Recent Comments of ECB Governing Council Members

29 January 2024

By David Barwick – FRANKFURT (Econostream) – The following is an overview of recent comments made by European Central Bank Governing Council members. We include only comments made since the Governing Council meeting of 25 January, but earlier comments can still be seen in versions up to that of 19 January.



Cipollone (ECB)


de Cos (Banco de España)


de Guindos (ECB)


Centeno (Banco de Portugal)


Elderson (ECB)


Herodotou (Central Bank of Cyprus)


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 (Banca d’Italia)


Reinesch (Central Bank of Luxembourg)


Schnabel (ECB)


Scicluna (Central Bank of Malta)


Šimkus (Bank of Lithuania)


Stournaras (Bank of Greece)


Välimäki (Bank of Finland)


Vasle (Banka Slovenije)


Villeroy (Banque de France)


Vujčić (Croatian National Bank)


Wunsch (National Bank of Belgium)


Christine Lagarde (ECB)
25 January 2024

‘First of all, the consensus around the table of the Governing Council was that it was premature to discuss rate cuts. In addition to that, I typically stand by my comments. So the comments I made to your television channel, Bloomberg, I certainly stand by them. I’m not sure that I would exactly characterise them as you have, but I stand by what I have said, not what others have commented that I have said. One other thing which was very much the consensus around the table was that we had to continue to be data-dependent. So rather than being fixated on any kind of particular calendar, which would be being date-dependent, we reaffirmed our data dependency. And I have flagged in the course of the monetary policy statement some of the areas that we will be particularly attentive to in the course of the next few months.’

‘But we are observing very carefully because we are seeing what you are all observing, which is that shipping costs are increasing, delivery delays are increasing and, while we all know that there is more shipping capacity than there was in 2020 and 2021, we also know that costs and fees are increasing. Now, I think most observers agree to say that it has a moderate impact. The percentage of the water transport costs is a little north of 1.5% of total input costs. But we are being very careful and looking attentively to the developments, and it’s pretty clear. I think whether you look at the IMF, the OECD, or other commentators, if the conflict in that region was to develop further, clearly that would be an additional risk, whether it’s a question of the disruption of shipping that we alluded to or the price of energy and commodities at large.’

‘We are seeing those indicators at a high level. What we are also seeing on the wage tracker is stabilisation, which explains the comments included in the monetary policy statement. And in Indeed we are seeing also a slight reduction of the volume of vacancies that are advertised. Now, we take all these data at face value, and we try to constantly corroborate them. We do that with the national central banks, observers, and economists to make sure that we really canvas the 20 Member States as accurately as possible. It’s not elusive because really, we’re trying to pin it down, but it requires that we look at it from multiple angles to make sure that we are as accurate and as up to date as we can be. Being forward-looking is not an easy one for wages. But just to give you an idea, I think it’s 40% of the employees covered by our wage tracker which have had their employment contract renewed without new terms of salary levels in December. So the 40% include those whose terms and conditions have expired and must be renewed at the end of December and those for which the same will happen in the first three months of 2024. So you have 40% of the workforce of whom salaries, wages, one-off payments are yet to be determined and will be tracked by our wage tracker. This information will come in the course of the next few months, which will be of course really rich in information to help us better understand exactly where we are on wages.’

‘As I said, we are data-dependent, and we make decisions one meeting at a time. What we have done in the course of this meeting today is that we have confirmed our inflation outlook and we consider that the information that we have received in the last few weeks since our December meeting showed that the medium-term inflation outlook is broadly following the path that we had projected in December. That’s point number one. Point number two, we look also very carefully at data concerning underlying inflation and here we are seeing a decline across the board of pretty much all our indicators. We also look carefully at inflation expectations. Those were a few weeks which were rich in information, where we have seen that both the market-based and the survey-based inflation expectations are also, both in the short term and for some of them also for the medium term, really coming in at around our 2% target. And of course, we look at the latest inflation numbers, and you will have seen all of you that the December number was 0.5pp north of the November number, which was this 2.4. But we had expected that upside, which was caused by base effects largely attributable to German measures. It was weaker than we had anticipated but it was totally predicted, and it does not detract from the view that we have that the disinflation process is at work.’

‘All I can say is that the consensus around the table of the Governing Council this morning was that it was premature to discuss rate cuts. It’s as simple as that.’

‘On wage growth, I think whether you look at past wage numbers, whether you dissect that in compensation per employee, in negotiated wages, taking on or excluding the one-off payments, we are seeing a slight decline. So it’s directionally good from our perspective. To your question about should it stabilise or should it decline, it’s already declining. Clearly, our hope is that the wage increases – because we are still seeing an increase, whether you look at 5.2% or 3.4% depending on what measurement item you take – are sufficiently absorbed by the profit unit, as we are seeing happening at the moment. So that it does not go into fuelling inflation, which would create the risk of a second-round effect, which we are not seeing for the moment. So the hypothesis that we had when we built the baseline of December, which was that the profit unit would eventually come down as a result of dampened demand as a result of our monetary policy stance, is actually happening, and there is a phenomenon of catching up for employees. It’s also one of the reasons why we see growth coming up and the recovery beginning in the course of 2024; because of rising wages while inflation comes down, which will free up some purchasing power, which hopefully will stimulate consumption.’

‘I think in terms of an overall evaluation of our policy trajectory, which many of you are after, we need to be further along in the disinflation process before we can be sufficiently confident that inflation will actually hit the target in a timely manner and in a sustainable way at target. So, it's a disinflation process in which we are. It is working but we need to be more advanced and we need to be further along in that process to be confident that inflation will be at target sustainably so.’


Isabel Schnabel (ECB)


Philip Lane (ECB)


Luis de Guindos (ECB)
29 January 2024

‘The good news is inflation has fallen a lot. In addition, all the underlying inflation indicators all indicate a downward trend.’

‘The evolution of inflation has been positive, we consider that the disinflation process, if no mistakes are made and no accidents, will continue in the future. Growth will be reduced, it will be the second year with growth below 1%. We believe that the markets' attention will shift from inflation to economic growth in Europe. But as I said before - and perhaps with that I’ll finish - the most important thing is attention is going to return to economic growth.’

29 January 2024 

‘There has been good news regarding the evolution of inflation, and that — sooner or later — will end up being reflected in the monetary policy.’

‘We are going to be dependent on the data, we don’t have any kind of calendar, it will depend on the evolution of inflation and I am optimistic regarding the evolution of inflation.’

‘What I would tell you is that the recession is not going to be deep and that the labour market is holding up.’


Piero Cipollone (ECB)


Frank Elderson (ECB)


Joachim Nagel (Bundesbank)


François Villeroy de Galhau (Banque de France)
28 January 2024

‘We are vigilant, particularly regarding possible consequences of the situation in the Middle East. But in this case, we would adapt, particularly in the timing of key rate cuts.’

‘We will lower our rates this year. On the precise date, none is excluded, and everything will be open in our next meetings. We will judge based on sufficient progress towards inflation at 2%, and we will have to avoid two risks which have become balanced: cutting too early and then letting go of the target, but also acting too late and excessively slowing down activity.’


Fabio Panetta (Banca d’Italia)


Pablo Hernández de Cos (Banco de España)


Klaas Knot (De Nederlandsche Bank)
28 January 2023

‘We now have a credible prospect that inflation will return to 2% in 2025. The only piece that's missing is the conviction that wage growth will adapt to that lower inflation.’ Once this is assured, the ECB ‘will be able to lower interest rates a bit.’


Pierre Wunsch (Belgian National Bank)


Mārtiņš Kazāks (Latvijas Banka)
26 January 2024

‘That [rushing to cut] would be by all means worse than waiting just a bit. We’ve seen from the 70s and 80s that if one starts to be relaxed too early then there’s the risk that inflation starts to come back and then one would need to raise rates much more.’

‘There are many ways to get to 2% — you could do earlier smaller steps or you could somewhat later larger steps — that will be all data dependent.’


Tuomas Välimäki (Bank of Finland)


Madis Müller (Eesti Pank)
26 January 2024

‘At this meeting of the Governing Council of the European Central Bank, we decided to keep the interest rates of the central bank at the same level. This was probably expected by all those who closely follow the activities of the central bank, and it is reasonable to expect the same from the next several monetary policy sessions.’

‘…it is not surprising that market analysts have begun to speculate more actively about when the European Central Bank will start lowering interest rates. … However, as a central banker, I have to admit that it is still too early to talk about the next interest rate decisions in a definite form. For this, there is simply too little confidence that the upward pressure on prices has eased to a sufficient extent. The core inflation indicator, which describes more permanent price pressure and excludes the impact of energy and food prices, is only close to 3.5%, and wage growth, which directly affects the prices of services in particular, is close to 5% on average in the euro area. This is not in line with the target set by the central bank, which is a sustained slowdown in price growth to close to 2%. At the same time, it is also clear that high interest rates have already cooled down the momentum of the credit market and the economy, which has also weakened the pressure for price increases.’

‘In essence, the Eurozone economy is stagnating at the moment, and it is not yet clear how quickly the expected recovery will actually materialise. The reason for moderate optimism is given by the purchasing managers' indices that have strengthened in recent months, which describe the expectations of companies and new orders for the coming year. Also, in the last months of last year, the global trade volume started to grow again. These are all positive signs. The labour market is still in a strong state - unemployment is at a record low in the euro area and the pace of wage growth is quite fast. After all, this is also a sign of entrepreneurs' faith in a better near future, because otherwise people would certainly not be recruited. At the same time, the current situation of the euro area economy does not seem too encouraging, if you look at the business volumes of companies or the behaviour and confidence of consumers.’


Boštjan Vasle (Banka Slovenije)
26 January 2024

‘The short-term price developments present a favourable outlook for the ongoing anti-inflation process. The main risks of more persistent high inflation continue to come from the tightness of the labour market and elevated wage growth.’

‘Our assessment is that if maintained sufficiently long, the current level of interest rates will make a significant contribution to the timely return of inflation to its target level. The next steps will continue to depend on the situation as it stands at the time, in particular on the economic and financial data, developments in core inflation, and the effectiveness of our measures. Our decisions will ensure that interest rates are kept at sufficiently restrictive levels for as long as it takes for inflation to return to our 2% target in a timely manner.’


Yannis Stournaras (Bank of Greece)
27 January 2024

‘The news is good on the inflation front, and if this trend continues then we will be able to start reducing interest rates after the end of the year’s first half.’


Peter Kažimír (National Bank of Slovakia)
29 January 2024

‘We stand at a crucial crossroads marked by slowing inflation. I stress that patience is essential before making pivotal decisions concerning the timing of the cut in our interest rates. Incoming data and the upcoming March update of our inflation projections will guide our decisions. The peak of the tightening cycle is behind us. The next move will be a cut and it is within our reach. I am confident that the exact timing, whether in April or June, is secondary to the decision’s impact. The latter seems more probable, but I will not jump to premature conclusions on the timing. As soon as it is warranted, we won’t hesitate to act. We are not behind the curve; it’s more the case that the market has got ahead of events since December. Acting hastily based on short-term surprises without having more clarity about the medium term would be risky. It could easily derail the progress we have made towards reaching our target. We exercise patience in the name of stability, that’s what we need. The global landscape remains riddled by uncertainties. We need to see if the early-year repricing delivers any surprises in the other direction. Wages agreements for the coming years are still an unpredictable factor too – a cat in the bag. The risks of a premature cut, in my view, are much greater than those of acting a bit later. One should always keep in mind, that we can act as swiftly and flexibly as necessary. I am confident in our capability and willingness to do so if needed. In a nutshell – though the signs are good, we do not yet have enough information to make a confident conclusion. For this reason, discussing the timing of an interest rate cut at this point is premature. Our decisions will be driven by data and subjected to rigorous analysis. Patience, in this context, is more than a virtue; it’s the cornerstone of sound economic policy. That’s desired and it will also be delivered.’


Mário Centeno (Banco de Portugal)
29 January 2024

‘I think we need to have confidence in the results that monetary policy is achieving. Patience is always needed in these processes, because these issues take time and we will remain dependent on data. I think the decision [of Thursday] is consistent with this.’

‘I think the most important message is that we currently have a lot of evidence that inflation is falling in a sustained manner, compatible with the medium-term objective, and that monetary policy has made a significant contribution for this development and that we will remain dependent on data. There is no question of a calendar, there is no fixed date on which we can make this or that decision. It is also necessary to understand that from yesterday's message comes an idea, in my interpretation: all options are open and that it is very clear that the direction of the decisions in the next meetings, is to evaluate the adequacy of the level of interest rates to this goal.’

‘Inflation has been systematically lower than we have predicted and this has happened in recent months, which is a very important period as it is the period of approach to the medium-term objective. And therefore, we should perhaps even be a little more sensitive to these news. And I say this because the objective is 2%. And we are sensitive to deviations, either up or down from that goal. And we are almost obliged to make decisions that are compatible with the elimination of these deviations. In other words, if there is no further shock that could justify an inflationary process, the terminal rate has been reached and we reached it in September. And it is natural that the next movement will be a movement to lower rates.

‘I'll be very clear: we don't need to wait for salary data in May to get an idea about the inflation trajectory.’

‘As for the labour market, we have been paying close attention to salary data for more than two years and absolutely nothing has happened that could tell us that there are second-round effects that are materializing - companies' total costs, at the moment, are to fall. A gradual recovery in real wages is expected, it has already happened in the United States, it has not yet happened in Europe, the latest data we have still does not show a recovery in wages on a quarterly basis. Normally salaries are a backward looking indicator , salary negotiation is done with information from the past, and therefore we have to be very careful with how we read a salary growth of 3%, a salary growth of 4%. We do expect a recovery in real wages in the medium term, but it has to be gradual and so we all have to pay attention. But there is a lot more information and [being] data dependent is not [being] wage data dependent .

‘Ideally, it [monetary policy easing] would be a continuous, sustainable process, without there being back-and-forth , and not abrupt.’

‘It [25bp steps] is a possible metric. We have also been rising in steps of 25bp, when the process began to stabilise. I think it's a good metric, but that decision is yet to be made. But always understood gradually. We should never hold our cards until the last minute, because this is more typical of games other than monetary policy.’


Gabriel Makhlouf (Central Bank of Ireland)
27 January 2024

‘Monetary policy is working and we’re seeing disinflation ... inflation is tracking downward in the EU and also in Ireland.’

‘I think we’ve probably reached the top of the ladder.’


Gediminas Šimkus (Bank of Lithuania)
17 January 2024

‘The further we go into 2024, the greater the chance of a rate cut. … The increase in the odds is exponential, not linear.’


Robert Holzmann (Austrian National Bank)


Boris Vujčić (Croatian National Bank)
26 January 2024

‘It [the communication at the press conference] nicely reflected the discussion we had in the two days. But lately I have the feeling that markets take whatever you say as being dovish. They have been very trigger happy.’

‘We need patience at the moment to get enough data to be confident that inflation is really firmly sustainably on the way to our medium-term target. That will come gradually, that will come over every month.’

Favours 25bp cuts

‘There is always the possibility’ of bigger steps. 25bp steps are a ‘smoother way of running monetary policy, but of course there’s also the possibility of doing more if warranted by the data.’


Gaston Reinesch (Central Bank of Luxembourg)


Constantinos Herodotou (Central Bank of Cyprus)


Edward Scicluna (Central Bank of Malta)