Insights

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.

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.