Insights

ECB Insight: Rehn, Having Missed the Memo on Data-Dependence, Predicts Interest Rate Path

By David Barwick – FRANKFURT (Econostream) – It is truly remarkable to what extent European Central Bank Governing Council members diverge in their interpretation of what a data-dependent, meeting-by-meeting approach to policymaking means in practice.

ECB Insight: Lagarde’s Meal Begins, With Crow on the Menu

By David Barwick – FRANKFURT (Econostream) – More than anything else, Tuesday’s interview of European Central Bank President Christine Lagarde with various European newspapers was an answer to the question, ‘How do you say Holzmann was right without saying Holzmann was right?’

ECB Insight: Holzmann’s Lonely Stand, We Suspect, Changes Little to Nothing

By David Barwick – FRANKFURT (Econostream) – The opposition of Austrian National Bank Governor Robert Holzmann to the European Central Bank’s decision yesterday to cut interest rates by 25bp must have been somewhat of a surprise not just to a large number of his fellow Governing Council members, but to Holzmann himself.

ECB Insight: Lagarde, as Data-Dependent as It Gets, Scrupulously Avoids Hints on Timing of Future Moves

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday succeeded in leaving even more uncertain than might have been expected the timing of any further interest rate cuts, though without undermining the idea that more monetary policy easing would be coming as the disinflation process continued and wages ultimately softened.

ECB Insight: Insiders See Likelihood of July Cut as Low, but Don’t Expect It to Be Excluded

By David Barwick – FRANKFURT (Econostream) – A July rate cut by the European Central Bank appears unlikely, given the need for the ECB to proceed with easing carefully and supported by data every step of the way, in the opinion of several insiders who spoke to Econostream very recently.

ECB Insight: A Rate Cut Everyone Can Support, and Then a Clean Slate

By David Barwick – FRANKFURT (Econostream) – Much of what filled this space ahead of the 11 April monetary policy meeting of the European Central Bank Governing Council remains valid now, starting with the idea that, as we said at the time, ‘a first rate cut in June should be everyone’s central scenario.’

ECB Insight: Lane, Warming to Looser Monetary Policy, Avoids Mention of ‘Caution’

By David Barwick – FRANKFURT (Econostream) – There having been essentially no question for some time about the main decision to emerge from the European Central Bank Governing Council’s 6 June meeting, Monday’s confirmation of the imminent rate cut by Executive Board member Philip Lane is less newsworthy than his other comments - and what he failed to say.

ECB’s Schnabel: Possible June Rate Cut Would Be Compromise Decision

By Isabel Teles – BONN, Germany (Econostream) – European Central Bank Executive Board member Isabel Schnabel on Friday said that that there were divergent views on the Governing Council about cutting interest rates, and that a consensus to cut in June would require a compromise.

ECB Insight: Inflation Under Control, Lagarde Says. Still Need to See Data, She Also Says

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday seemed to want to frame a potential June rate cut in strictly conditional terms, meaning data-dependent, only to then utter words that we understood as firmly endorsing a cut and indeed policy easing in general.

ECB Insight: Continuity Appropriate; Lagarde to Stay the Course as June Objective Comes Within Reach

By David Barwick – FRANKFURT (Econostream) – When European Central Bank Governing Council members of such disparate stripes as Austrian National Bank’s Robert Holzmann and De Nederlandsche Bank’s Klaas Knot on the hawkish side or Bank of Greece Governor Yannis Stournaras and Banco de España head Pablo Hernández de Cos on the dovish side all clearly expect the ECB to start loosening monetary policy in June, then a first rate cut in June should be everyone’s central scenario.

ECB Insight: Cipollone Follows in Predecessor’s Footsteps, Minimising Wage Concerns and Urging Faster Policy Loosening

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone on Wednesday faithfully carried on the tradition of his predecessor with a speech intended above all to undermine the ECB’s unjustifiably timid approach to monetary easing.

ECB Insight: Lagarde Acknowledges Risk of Waiting Too Long, Reinforces June’s Pole Position

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Wednesday made it clearer yet that the ECB would before long, most probably in June, start easing its monetary policy stance, even in the absence of complete certainty about the choice of timing.

ECB Insight: Insiders See Data Deciding Frequency of Further Moves After First 25BP Cut In June

By David Barwick – FRANKFURT (Econostream) – The European Central Bank Governing Council appears headed for a series of rate cuts of 25bp each, with the question of whether these cuts should only occur in conjunction with projection meetings still very much up in the air.

ECB’s Reinesch: Grounds to Expect First Rate Cut at End of 2Q if Data Confirm Forecasts

By David Barwick – FRANKFURT (Econostream) – The European Central Bank is likely to start cutting interest rates at the end of the second quarter if the latest information are consistent with current forecasts, according to ECB Governing Council member Gaston Reinesch.

ECB Insight: Framework Announcement Tomorrow Likely to Signal Start of Transition Process

By David Barwick – FRANKFURT (Econostream) – The European Central Bank is set to announce the outcome of its operational framework review on Wednesday, following a final meeting, held virtually, of the Governing Council.

ECB’s Makhlouf: Prefer Gradual Changes to Monetary Policy Stance

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Saturday said that when the time came for the ECB to modify its monetary policy stance, gradual changes would be preferable.

ECB Insight: Lagarde Confirms That June Meeting the One to Watch: ‘We Will Know a Lot More in June’

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday delivered a performance in line with the largest part of Governing Council members’ communication in recent weeks pointing to June as being the likeliest start of monetary policy easing.

ECB Insight: Marking Time

By David Barwick – FRANKFURT (Econostream) – Aside from a few outliers impatient for looser European Central Bank monetary policy (and a number favouring a particularly leisurely approach), it is apparent at this point that the Governing Council has its sights tentatively set on the June meeting as the most promising candidate for the first rate cut.

ECB Insight: Governing Council Tally Shows ‘Premature’ Camp Still Leading, but Not Overwhelmingly

By David Barwick – FRANKFURT (Econostream) – A member-by-member review of the European Central Bank Governing Council with respect to the preference to tackle policy easing more or less slowly reveals that the camp of those continuing to see interest rate cuts as premature dominates, though the opposition has gained ground.

ECB Insight: Insider Thinking on the Operational Framework