Insights

ECB Hawk-Dove Ranking: Council Becoming Less Hawkish

ECB Insight: More Ground to Cover, Says Lagarde, But Don’t Ask How Much

By David Barwick – FRANKFURT (Econostream) – The European Central Bank delivered more or less as expected on Thursday, opting to slow the pace of its tightening whilst making clear that, given the lack of a clear impact of higher borrowing costs on the real economy, this was not to be understood as the end of the hiking cycle.

ECB Insight: Default Option of 25BP Likely to Prevail as Data Fail to Meet Standard for 50BP

By David Barwick – FRANKFURT (Econostream) – Directly following the European Central Bank Governing Council’s last monetary policy meeting, we inclined to the opinion that another 50bp hike in May was somewhat likelier than the only other reasonable alternative of 25bp.

ECB Insight: Option of 25BP Hike Leads, but Tally of Council Underscores Risk of Surprise

- Pre-meeting summary below of all ECB Governing Council members' policy views

ECB Insight: Centeno, Dealt a Stronger Hand, Relishes the Chance To Play It

By David Barwick – FRANKFURT (Econostream) – As if he heard opportunity knocking, European Central Bank Governing Council member Mário Centeno has been doubling down on his expressions of desire to see his peers start applying patience to the setting of monetary policy.

ECB Insight: Governing Council at Last Goes Well and Truly Data-Dependent, Albeit for Lack of Alternatives

By David Barwick – FRANKFURT (Econostream) – The European Central Bank stuck to its guns on Thursday, with President Christine Lagarde’s relatively surefooted handling of the press conference after the Governing Council meeting characterised by a calm insistence on data-dependence and watchfulness in the context of a job likely not yet done.

ECB Insight: Growing Dissension, SVB Fallout Make Retreat to Data-Dependence More Attractive

By David Barwick – FRANKFURT (Econostream) – In considering what this week’s meeting of the European Central Bank Governing Council will bring, we start from the observations that a 50bp hike this week across the board is probably a given despite the Silicon Valley Bank insolvency, putting the spotlight on the post-March policy outlook, and that the Council is showing signs of increasing polarisation.

ECB Insight: Comments by Centeno Underscore Obstacles to Large Rate Hikes Post-March

By David Barwick – FRANKFURT (Econostream) – Past the habitual dovishness, other, at first glance less substantive comments published Monday in an interview with European Central Bank Governing Council member Mário Centeno may actually offer the more interesting insight into the challenge the ECB will face in maintaining the current pace of monetary tightening beyond March.

ECB Insight: Post-Finland Comments Cast Doubt on a Slowdown of the Pace of Hiking in May

By David Barwick – FRANKFURT (Econostream) – Observers of European Central Bank monetary policy would be well advised to pay heed to the comments of Governing Council members since last week’s non-monetary policy meeting, as they leave open policy option doors that under other circumstances might have now been closing.

ECB Insight: Monetary Policy Very Much on the Mind in Northern Finland

- ECB’s Kazāks: Council retreat occasion to align our views, express our worries and perspectives
- ECB’s Kazāks: ‘The meeting in Finland will prepare us for policy decisions going forward’

ECB Hawk-Dove Ranking: Vujčić Ranked as Mildly Hawkish

ECB Insight: de Cos Sets the Stage for Worrying Not Just About Risk of Doing Too Little

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Pablo Hernández de Cos’ latest remarks are a reminder that the ECB is not going to hike by 50bp forever and that March, whilst probably not the time to decelerate, could be the right moment for authorities to start giving more consideration to the increasing risks of doing too much too fast.

ECB Insight: Once Again, the Governing Council Has an Intention

By David Barwick – FRANKFURT (Econostream) – Not for the first time at the European Central Bank, monetary policy has come down to a matter of how much an intention is worth, but with the significant difference that on this occasion, President Christine Lagarde made an earnest effort to address this question, even if the attempt raised yet more questions.

ECB Hawk-Dove Ranking: Lagarde, Lane and other Governing Council Members Reranked

ECB’s Governing Council Likely Still Inclined to Hike Significantly at a Steady Pace

By David Barwick – FRANKFURT (Econostream) – Rare is the European Central Bank Governing Council meeting devoid of suspense, and although the primary outcome of this week’s gathering – a 50bp hike of all key interest rates – seems a foregone conclusion, what kind of stage President Christine Lagarde will set for the subsequent meeting is well worth speculating about.

ECB’s Villeroy: Will Hike as Needed to Restore Price Stability; Won’t Lead to Recession

- Villeroy: Will continue to raise rates, perhaps at slightly slower pace than in recent months
- Villeroy: ‘Economic activity in Europe is rather resilient and better than expected’
- Villeroy: Expect inflation to be back down to 2% by the end of 2024 or 2025
- Villeroy: Hope inflation now at peak, but in any case will be there in 1H and then decline steadily

ECB’s Nagel: Expect Euro Area Inflation to Be Back at 2% End-2024, 2025

- Nagel: We will restore price stability without causing recession
- Nagel: Don’t notice monetary policy differences between Germany and France

ECB Insight: Jockeying of Hawks Only Underscores Growing Likelihood of Council Rift

By David Barwick – FRANKFURT (Econostream) – The new year does not appear to have brought any change in European Central Bank Governing Council hawks’ ability to dominate the public discourse, even if their recent comments don’t offer policy insight as much as they reflect the risen probability of a greater split in the ranks down the road.

ECB Insight: Lane Got it ‘Fundamentally’ Right, Or So He Says

By David Barwick – FRANKFURT (Econostream) – How satisfying to look back at an extraordinarily challenging time and be able to confirm that even a pea soup fog of uncertainty didn’t prevent one from acting unerringly. That’s the fortuitous position European Central Bank Executive Board member Philip Lane appears to be in, based on his interview Tuesday with the Financial Times.

ECB Insight: Rehn Sounds Hawkish, But Not Unreservedly So

By David Barwick – FRANKFURT (Econostream) – At first glance, European Central Bank Governing Council member Olli Rehn’s comments on Monday appear to be hawkish. On a second look, a degree of reservation stands out.