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ECB Comment Recap: September Pause Holds Firm as Some Call for Further Easing Later

5 September 2025

ECB Comment Recap: September Pause Holds Firm as Some Call for Further Easing Later
European Central Bank building during the 2025 Europa Open Air in Frankfurt am Main. Photo by the ECB under CC BY ND-NC 2.0.

By Marta Vilar – MADRID (Econostream) – Following is a collection of views expressed by ECB Governing Council members on various topics of high relevance related to next week’s meeting and the further evolution of monetary policy:

Future moves – leaning towards pausing:

 

Further easing:

 

September meeting:

  • ECB Executive Board member Piero Cipollone – 26 July: “In September – and later this year – we will have more information, which will feed into revised macroeconomic projections. We will then reassess our stance, in line with our data-dependent and meeting-by-meeting approach. In particular, we will be in a better position to assess the trade situation and look through the volatility generated by frontloading effects.”

 

Market expectations:

 

Future hikes:

 

Inflation:

 

Trade:

  • Bank of Lithuania Governor Gediminas Šimkus – 2 September: “The outlook hasn’t changed significantly. We’re more or less in the same world as a couple of months ago. The effective tariff on European goods of about 15% is a bit higher than in our June projections, but the difference is not big.”
  • Bank of Finland Governor Olli Rehn – 31 August: Trade deal had “both negatives and positives” but was “worse than assumed in our June baseline.”
  • ECB Vice President Luis de Guindos – 29 August: “If you ask me for my opinion, I would say it leaves a bittersweet taste. On the positive side, there has not been an escalation into what could have become a trade war — that is clearly positive for Europe and has reduced uncertainty. This uncertainty had been affecting not only export and import decisions but also investment and consumption. On the less positive side, the U.S. will ultimately increase its average effective tariff on European products to just over 14%, up from a much more favorable situation previously, when tariffs were below 3%.”
  • Banque de France Governor François Villeroy de Galhau – 26 August: “Europe has signed an agreement that may have been inevitable but cannot be considered positive.”
  • ECB President Christine Lagarde – 25 August: US tariff should have a “small impact” on European growth … “Once there is certainty and it [the EU-US trade deal] is not going to be challenged and renegotiated a hundred times, I think that enterprises are going to deal with it [higher tariffs].”
  • ECB President Christine Lagarde – 20 August: “This effective average tariff is somewhat higher than – but still close to – the assumptions used in our baseline projections last June. It is worth noting that the outcome of the trade deal is well below the severe scenario for US tariffs of over 20% for euro area goods envisaged in the June projections.”
  • Austrian National Bank Governor Robert Holzmann – 5 August: “the US may have an advantage, as they get additional revenues and reduce their trade deficit. On the other hand, it requires a substantial change to the US economy. And I question whether the change will be as Mr Trump hopes.”
  • National Bank of Slovakia Governor Peter Kažimír – 28 July: The EU-US trade agreement was “positive” and “welcome”, and contributed to alleviate uncertainty, but it would take time to determine the implications for future inflation.
  • Eesti Pank Governor Madis Müller – 25 July: “Trade restrictions and the associated uncertainty will undoubtedly slow down the economy, but they are expected to do so less than feared, at least in the near term.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 25 July: “[I]f the trade dispute is resolved quickly and excessive uncertainty is removed, some improvement in confidence may support investment and consumption, thereby reducing the clearly negative impact from the tariffs.”

 

Inflationary impact of trade:

  • ECB Executive Board member Isabel Schnabel – 2 September: “However, we are starting to see the tariffs having some inflationary impact there [in the US], especially among more tariff-sensitive goods, like consumer electronics and furniture. I expect these inflationary pressures to increase over the coming quarters because firms may feel the cost increase more and more as their inventories are exhausted. And firms may also be less and less willing to absorb the higher costs in their margins. This is something that we have to watch very carefully – one of the lessons from the pandemic is that it's very hard to insulate ourselves from global inflationary developments.”
  • ECB Vice President Luis de Guindos – 29 August: “Tariff increases are essentially a tax on imports, and therefore inflationary. Although, looking a little further ahead, what we see is that aggregate demand is reduced — and this reduction in demand may more than offset the initial inflationary impact. In the long term, as I mentioned earlier, tariff increases will ultimately lead not to deglobalization of the world economy, but certainly to a reduction in the intensity of globalization as we have known it in recent decades.”
  • Bank of Finland Governor Olli Rehn – 25 July: “They [tariffs] would significantly weaken Eurozone growth, further dampening inflation.”
  • Banque de France Governor François Villeroy de Galhau – 25 July: “The tariff increases in the United States, the extent of which is still uncertain, are unlikely to cause it to rise, while the appreciation of the euro represents a significant disinflationary effect.”

 

Exchange rate:

  • Bank of Lithuania Governor Gediminas Šimkus – 2 September: “It [a strong euro] adds to the downward pressure on prices in Europe … We will see to what extent it negatively affects price developments, but it supports my view that the risks are tilted to the downside, both to growth and inflation.”
  • ECB Executive Board member Isabel Schnabel – 2 September: “if you take a historical perspective, the moves in exchange rates that we’ve seen are not particularly large, also against the US dollar, which is the most important currency because of its role in invoicing. Second, the pass-through of the exchange rate appreciation may be smaller than suggested by standard elasticities.”
  • Bank of Finland Governor Olli Rehn – 28 August: “Despite all the trade wars and power politics, I consider a rapid, significant weakening of the dollar’s dominance unlikely.”
  • Austrian National Bank Governor Robert Holzmann – 5 August: “the dollar will remain a major player in the international monetary system, so I don’t expect a continued depreciation. And given that the US will have higher budget deficits and will need higher interest rates to finance it internationally, this suggests that US Treasuries must remain attractive enough to finance the deficits, since the tariff revenues won’t cover that.”
  • Eesti Pank Governor Madis Müller – 25 July: It is “interesting to note that the euro exchange rate, which has appreciated significantly over the past six months, has not had a negative impact on euro area exports.”

 

Growth:

  • Eesti Pank Governor Madis Müller – 2 September: “In light of all of this turmoil that we have seen in the recent past, starting with the trade policy in the US; also the impact of war in Ukraine that we have now for a number of years, the economy has held up quite well in Europe.”
  • Bank of Lithuania Governor Gediminas Šimkus – 2 September: “The economy is a half-full glass. Growth is very slow. Some people see it returning to potential. Others, like me, are more inclined to see downside risks. Growth slowed quite substantially in 2Q compared to 1Q, coming in a bit below our projections. Overall, I continue to think that risks to the economy and to inflation are still tilted to the downside.”
  • ECB Executive Board member Isabel Schnabel – 2 September: “Incoming data have confirmed the resilience of the euro area economy. Over the past one and a half years, the euro area economy has grown by around 0.3% per quarter, which is broadly in line with potential growth. This is quite remarkable given all the economic and trade policy uncertainty that we’ve seen. It underlines that the euro area economy has been more resilient than expected.”
  • ECB Vice President Luis de Guindos – 29 August: “The data we have from the first half of the year should be taken with caution, with a fair amount of care. Why? Because they are relatively distorted by certain factors. Firstly, by Ireland’s contribution, which is very volatile: 1Q was very strong, while 2Q was much weaker. Secondly, because the figures were also influenced by the negotiations over the trade agreement with the United States. There was a frontloading of operations in 1Q, which were then, in some way, reversed in 2Q. We believe 3Q will not be very different from 2Q, which means that, according to our projections, growth will be around 1%. Growth is modest, but despite uncertainty, a recessionary situation in Europe has been avoided.”
  • Bank of Finland Governor Olli Rehn – 28 August: “Euro area economic growth has proven to be more sustainable than expected.”
  • Banque de France Governor François Villeroy de Galhau – 26 August: “When you compare Europe to the rest of the world, it's not doing too badly... But these significantly increased tariffs remain bad news.”
  • ECB President Christine Lagarde – 25 August: Economy is now “resilient” but “not thriving”.
  • ECB President Christine Lagarde – 20 August: The effect of frontloading is unwinding and is driving the 2Q growth slowdown.
  • Austrian National Bank Governor Robert Holzmann – 5 August: “I’m not optimistic about growth, because even if German infrastructure investment is €100 billion and defense spending several times as much, it won’t make a huge difference, given that other countries face fiscal struggles.”
  • ECB Executive Board member Piero Cipollone – 26 July: “In the first quarter, the economy grew more strongly than expected, largely because firms frontloaded exports and capital goods investment ahead of expected tariff hikes. In contrast, private consumption growth moderated and the savings rate increased.”

 

Projections:

 

Risks:

  • Banco de España Governor José Luis Escrivá – 28 July: “we also have to look at the inflation risks balance, and there are factors that could move in both directions.”
  • ECB Executive Board member Piero Cipollone – 26 July: “Overall, we continue to see risks to economic growth as tilted to the downside, but the outlook for inflation is more uncertain than usual. In particular, we will need to see how prices in the euro area are affected by trade disruptions – including their impact on supply chains as well as on trade diversion that is already resulting in higher euro area imports from China.”

 

France:

 

Labor market: