Insights

ECB Hawk-Dove Ranking: Croatia’s Vujčić Joins Governing Council

Seeking Compromise on a Rate Hike, But Can Progress on QT Help the ECB Get There?

By David Barwick – FRANKFURT (Econostream) – Econostream continues to expect the outcome of this week’s European Central Bank Governing Council meeting to be a 50bp rate hike, a view we’ve held more or less since 28 October, when President Christine Lagarde clearly set the stage for a deceleration of the tightening pace.

ECB Insight: Lane Retreats to Safer Ground on Question of December Rate Hike Size

By David Barwick – FRANKFURT (Econostream) – Strictly speaking, European Central Bank Chief Economist Philip Lane cannot be said to have walked back his previous interview in the one published on Tuesday. But what might appear at first glance to have been doubling down was in fact decidedly more cautious in tone and scope than last month.

ECB Hawk-Dove Ranking

ECB Insight: Lagarde, Perhaps Wary of Growing Council Divergence, Seeks Tighter Control over NCB Communications

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde is seeking to reinforce the existing ECB communications policy applicable to top Eurosystem officials, according to insiders who spoke to Econostream recently.

ECB Insight: Lagarde Unmistakably Hawkish; ‘It Would Surprise Me’ if Inflation Already at Its Peak

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Monday showed herself from her hawkish side, making it considerably less clear whether the Governing Council would really temper its pace of rate hiking as soon as next month, but also raising the question of how bold forthcoming quantitative tightening decisions will turn out.

ECB Insight: Knot, Dialling Rate Hike Rhetoric down a Notch, Borrows a QT Page from Villeroy

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot’s comments on Friday suggest that he may be backing down from his earlier enthusiasm for the possibility of a renewed 75bp rate hike in December.

ECB Insight: Council Members’ Comments Suggest a Cautious Start to QT Start Doable in 1Q

By David Barwick – FRANKFURT (Econostream) – As the public discussion of the European Central Bank’s approach to quantitative tightening heats up, one can venture some guesses about what will materialise, based on Governing Council members’ contributions to that discussion.

They Said It: Recent ECB Policymaker Comments on Quantitative Tightening

By David Barwick – FRANKFURT (Econostream) – To the reasonably complete compendium published here last Thursday of recent public comments by European Central Bank Governing Council members touching on the subject of quantitative tightening, we have added remarks made on Friday.

ECB Insight: Nagel, Though Hawkish as Usual, Sticks to the Beaten Path

By David Barwick – FRANKFURT (Econostream) – The speech made Friday afternoon by European Central Bank Governing Council member Joachim Nagel ultimately offered little to guide ECB watchers.

ECB Insight: Lagarde Excludes Full-Bore Approach to QT, Stressing Primacy of Interest Rates

By David Barwick – FRANKFURT (Econostream) – Comments made by European Central Bank President Christine Lagarde on Friday effectively excluded a full-throated initial approach to unwinding the ECB’s balance sheet.

They Said It: Recent ECB Policymaker Comments on Quantitative Tightening

By David Barwick – FRANKFURT (Econostream) – We have assembled below a reasonably complete compendium of all recent public comments by European Central Bank Governing Council members touching on the subject of quantitative tightening, favouring direct quotes where possible.

ECB Insight: Villeroy Warns Again Not to Expect ‘Jumbo Habit’ When it Comes to Rate Hikes

By David Barwick – FRANKFURT (Econostream) – In a speech in Tokyo on Tuesday, European Central Bank Governing Council member François Villeroy de Galhau cautioned observers of ECB monetary policy against expecting ‘jumbo rate hikes’ to become a habit.

ECB Insight: Comments of Council Members Continue to Suggest More Cautious Approach to Normalisation

By David Barwick – FRANKFURT (Econostream) – Two days ago, we argued here that it seemed pointless to debate whether the European Central Bank’s communication has been setting the stage for what some call a pivot, so obvious has it been.

ECB Insight: The ECB Is Setting the Stage for a Pivot, But Uncertainty About the Timing Makes it Tougher

By David Barwick – FRANKFURT (Econostream) – Whether or not the European Central Bank executes a monetary policy pivot as early as December, it seems hardly a matter of debate that its communication has already been laying the groundwork for one to come sooner or later.

ECB Insight: Lagarde Promises ‘Further Rate Increases’ to Be Determined Meeting by Meeting

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday repeated with no obviously significant deviation the main messages of last Thursday’s post-Council meeting press conference, promising despite risen recessionary risks further rate hikes based on a meeting-by-meeting approach.

ECB Insight: Knot May Be Getting Ahead of Himself in Supporting Another 75bp Hike

By David Barwick – FRANKFURT (Econostream) – Just days after the European Central Bank Governing Council decided to hike interest rates by a whopping 75bp for the second time in a row, one of its leading hawks, Klaas Knot, has positioned himself as leaning in the direction of a third such outsize step. He may be getting ahead of himself.

Greek Banks Not Facing Deposit Outflow; Will Eventually Pass Through Rate Hikes to Depositors, Says Official

By David Barwick – ATHENS (Econostream) – Greek banks faces no particular threat of a substantial outflow of deposits and are expected to eventually pass along to their depositors the interest rate hikes of the European Central Bank, a high-level Greek official assured Econostream.

The Done Deal

By David Barwick – FRANKFURT (Econostream) – Just as it surprised on the hawkish side in July, the European Central Bank’s normalisation of policy may eventually include a surprise on the dovish side. While we rate the chances of this in October a tad higher than most observers seem to, we don’t think it will occur now.

ECB Insight: Schnabel Comments Boost Odds of 75bp Rate Hike in October

By David Barwick – FRANKFURT (Econostream) – Comments by European Central Bank Executive Board member Isabel Schnabel published on Thursday appear to increase the likelihood that the ECB will opt for another 75bp hike next month, which would make for its second outsize rate step in a row.