ECB’s Holzmann: Severe Scenario May Be Baseline Now; Could See HICP of 10% or Higher
- Worries inflation of 10% and higher could be coming, with output stagnant or negative
- Suggests that much depends on Chinese willingness to help resolve war
- Initial signs that inflation expectations may be rising
ECB officials saw March HICP forecast as too optimistic, Econostream understands
- Official: Clear already during the meeting that the baseline scenario is too optimistic
- Official: We’re now in one of the other more negative scenarios, not the baseline
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Ignazio Visco on Thursday said that the ECB was not behind the curve. Coming from him, the ECB might want to reconsider whether it is at heightened risk of this happening.
18 March 2022
By David Barwick – FRANKFURT (Econostream) – A close look at European Central Bank President Christine Lagarde’s comments on Thursday suggests, albeit subtly, somewhat more pessimism about inflation than just a week previously.
17 March 2022
By David Barwick – FRANKFURT (Econostream) – Russia’s invasion of Ukraine is no reason to think medium-term inflation prospects in the euro area have become less worrisome, European Central Bank Governing Council member Klaas Knot implicitly suggested on Thursday.
17 March 2022
By David Barwick – FRANKFURT (Econostream) – Some 2.5 million Ukrainian refugees have entered the EU in the last few weeks as a result of Russian military aggression, but this is so far seen by the ECB as being of limited relevance for labour market developments, Econostream understands.
15 March 2022
By David Barwick – FRANKFURT (Econostream) – The days of the targeted longer-term refinancing operations (TLTROs) of the European Central Bank seem likely to be numbered, Econostream understands.
14 March 2022
By David Barwick – FRANKFURT (Econostream) – The European Central Bank’s asset purchase programme could potentially wind up ending in the second quarter, Econostream understands.
11 March 2022
By David Barwick – FRANKFURT (Econostream) – The European Central Bank Governing Council’s decision on Thursday should be understood less as an acceleration than as a logical response to an array of macroeconomic factors inconsistent with the present policy stance, in the view of one insider who spoke to Econostream.
11 March 2022
By David Barwick – FRANKFURT (Econostream) – Against the backdrop of high inflation, the European Central Bank Governing Council arrived relatively easily at an agreement this week not to wait until April to make monetary policy decisions, Econostream understands.
11 March 2022
By David Barwick – FRANKFURT (Econostream) – After only last month finally starting to take upside inflation risks as seriously as many of her European Central Bank Governing Council colleagues had taken them for some time, President Christine Lagarde made it clear on Thursday that, ‘watershed’ event or not, for now Russia’s assault on Ukraine was not going to deter the ECB from pursuing normalisation.
10 March 2022
ECB President Christine Lagarde is likely to maintain course towards monetary policy normalisation but to stress optionality, gradualism and flexibility
8 March 2022
By David Barwick – FRANKFURT (Econostream) – Following is the full transcript of the interview conducted by Econostream on March 02 with Mārtiņš Kazāks, Governor of Latvijas Banka and member of the Governing Council of the European Central Bank:
2 March 2022
- Outlook more uncertain, war adds quite a few negatives to outlook
- Ending asset buys in Q3 still possible, but let’s assess situation first
- Must ultimately normalise monetary policy and cannot forget about this
By David Barwick – FRANKFURT (Econostream) – It was never likely to take long for those European Central Bank Governing Council members fundamentally disinclined to tighten monetary policy to hang their hat on what until late yesterday was still just a looming invasion of Ukraine by Russian dictator Vladimir Putin.
24 February 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council Philip Lane on Wednesday sounded at pains to meet the hawks part way while implicitly rejecting the more alarmist views about price pressures as he conveyed his main message: that high inflation would ultimately give way to price stability.
24 February 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Robert Holzmann supports tightening monetary policy, and essentially made this clear again on Wednesday for anyone who has been under a rock lately; the details are naturally interesting but the overall picture hardly changes as a result.
23 February 2022
By David Barwick – FRANKFURT (Econostream) – Having done a first review last week of European Central Bank Governing Council members’ individual inclination to initiate a hiking cycle this year, we now repeat the exercise in light of relevant comments made since then.
22 February 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Tuesday sought to avoid throwing out the baby with the bathwater, preserving some semblance of forward guidance for ECB policy while acknowledging room for improvement.
16 February 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel’s latest comments suggest that the ECB has become more serious yet about heading inflation risks off at the pass and raise the stakes for the March Governing Council meeting.
16 February 2022