Central Bank Exclusives

ECB Insight: If PEPP’s Flexibility Ends With It, ECB Will Need to Signal Ability to Handle Problems

By David Barwick – FRANKFURT (Econostream) – As the emergency phase of the pandemic marches on towards its end, perhaps the toughest debate awaiting the European Central Bank’s Governing Council is that about how much of the pandemic emergency purchase programme (PEPP)’s vaunted flexibility can and should be retained beyond the life of the PEPP.

ECB Insight: Lagarde Launches Sintra With Standard Policy Prescriptions and More Neutral Tone

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday took a step back from her recently relatively hawkish language on inflation as she delivered a carefully scripted speech devoid of new policy conclusions to open the ECB Forum on Central Banking.

ECB Insight: Lagarde Sows Doubts About Usefulness of Current HICP Projections

By David Barwick – FRANKFURT (Econostream) – Of the possible takeaways from European Central Bank President Christine Lagarde’s European Parliament Q&A on Monday, a prominent candidate might be that the Eurotower doesn’t put too much stock in its latest inflation projections.

ECB Insight: Lagarde Mostly Steers Clear of Chances to Shed Light

By David Barwick – FRANKFURT (Econostream) – Wide-ranging as it was, the interview by CNBC with European Central Bank President Christine Lagarde published Friday yielded less news than might be expected, not because Lagarde was not asked important questions, but rather because she appeared determined to stick to safe ground and avoid further fueling public debate.

ECB Insight: Müller Takes a Robust Stand, Adding to Hawks’ Momentum

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Madis Müller on Wednesday became the latest monetary policymaker to paint a picture of the euro area economy that would be consistent with a withdrawal of support, a conclusion he was not hesitant to reach.

ECB Insight: de Guindos Ratches up the Hawkishness

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Vice President Luis de Guindos on Tuesday ratcheted up the hawkishness, sounding almost but not quite alarmed about the potential for price pressures to remain elevated and declaring economic risks that had loomed large earlier in the crisis to be essentially null and void.

ECB Insight: Stournaras Ready to Have His Cake and Eat It, Too

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Monday provided a glimpse into the nature of the tussle awaiting the euro area’s monetary authorities, lining up with numerous colleagues who’ve already conceded brighter inflation prospects, yet remaining as unwilling as ever to take the logical next step towards reduced accommodation.

ECB Insight: Drumbeat of Inflation Warnings Gaining in Volume

By David Barwick – FRANKFURT (Econostream) – Officials of the European Central Bank have been all but lining up in recent days to sound the alarm with respect to the potential for euro area inflation to come back to life sooner and more vigorously than expected.

ECB Insight: de Cos’ Remarks Show a Certain Evolution, But No Conversion

By David Barwick – FRANKFURT (Econostream) – A close look at the interview published Sunday with European Central Bank Governing Council member Pablo Hernández de Cos reveals him to be slowly taking on board at least some of the optimism finally infecting the less hawkish side of the Council. By no means has he undergone a full-bore conversion.

ECB Brief: de Guindos Sees Potential for Even Higher 2021 HICP, Stronger Wage Developments

ECB Insight: ECB Sets Its Own Traps, Then Falls into One and Flounders

By David Barwick – FRANKFURT (Econostream) – The European Central Bank has essentially stumbled headlong into a pitfall of its own making after information regarding the institution’s expectations of future inflation was apparently shared by Chief Economist Philip Lane with private bankers.

ECB Insight: Council Members With Right to Vote in December Relatively Dovish, But May Not Matter

By David Barwick – FRANKFURT (Econostream) – With European Central Bank President Christine Lagarde having made clear last Thursday that the Governing Council would defer major decisions until December, the question of which members are formally entitled to vote at that meeting may be of particular interest.

ECB Insight: Schnabel, a Bit More Forcefully, Invokes the Potential for an Inflation Recovery

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel on Monday combined strong rhetoric from both sides of the hawk-dove spectrum of the ECB’s Governing Council as she once again, though in more forceful terms, put on notice those anticipating persistently weak inflation.

ECB Insight: Lagarde Puts Big Decisions Off To December; ‘More Substance to Chew on’

By David Barwick – FRANKFURT (Econostream) – As suggested in this space some weeks ago, European Central Bank President Christine Lagarde on Thursday deferred to December major pending decisions of the ECB Governing Council.

ECB Insight: Making APP Every Bit as Flexible as PEPP May Be an Unlikely Outcome

By David Barwick – FRANKFURT (Econostream) – With the European Central Bank’s pandemic emergency purchase programme (PEPP) looking likely to decelerate in 4Q before being allowed to expire at the end of 1Q, barring an extension, speculation concerning the pre-existing asset purchase programme (APP) is mounting.

ECB Insight: Hawkish Policy Move Likely to Be Offset by Dovish Rhetoric

By David Barwick – FRANKFURT (Econostream) – For the first time in a long time, Thursday’s monetary policy meeting of the European Central Bank’s Governing Council is an occasion on which the hawkish point of view stands a decent chance of prevailing.

ECB Insight: Updated Staff Projections May Be Next Week’s Major News, Absent Big Decisions

By David Barwick – FRANKFURT (Econostream) – With the European Central Bank Governing Council potentially to refrain from making big decisions next week despite the quantitative underpinning of new staff macroeconomic forecasts, the updated outlook for growth and inflation may itself be the major news to emerge from the monetary policy meeting.

ECB Brief: Preponderance of ECB Comments Suggest 4Q PEPP Deceleration Possible

By David Barwick – FRANKFURT (Econostream) – This is an overview of policy-relevant comments made in the last two weeks by European Central Bank Governing Council members, in particular such comments as may indicate how the speaker would regard a reduction in 4Q of the volume of pandemic emergency purchase programme (PEPP) purchases:

ECB Insight: VP de Guindos Echoes Others Already Calling for Less ECB Support

By David Barwick – FRANKFURT (Econostream) – Taking into account that the number two at the European Central Bank is never likely to express himself in a way that pre-commits his institution too clearly, Vice President Luis de Guindos’ remarks on Wednesday were a strong indication that the ECB would reduce support at next week’s meeting.

ECB Insight: Villeroy Leaves Little Doubt That Major Decisions to Need More Time

By David Barwick – FRANKFURT (Econostream) – With just days to go until the members of the European Central Bank’s Governing Council will presumably start observing the quiet period ahead of monetary policy meetings, Council member François Villeroy de Galhau has apparently confirmed that observers should not expect much from the September 9 gathering except, as he strongly hinted, a slowdown in the monthly asset purchase pace.