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They Said It: Recent ECB Policymaker Comments on Quantitative Tightening

By David Barwick – FRANKFURT (Econostream) – To the updated version published one week ago of recent public comments by European Central Bank Governing Council members touching on the subject of quantitative tightening, we have added remarks made in the meanwhile.

ECB’s Scicluna: Balance Sheet Reduction to Be Predictable and Gradual

By David Barwick – FRANKFURT (Econostream) – The European Central Bank's effort to reduce the size of its balance sheet would be 'predictable and gradual', ECB Governing Council member Edward Scicluna said Friday.

ECB’s Stournaras: ‘Further Rate Increases Will Need to Be Gradual’

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Thursday came out in favour of making any more ECB rate hikes ‘gradual’.

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.

TRANSCRIPT: Interview with European Central Bank Governing Council member Mario Centeno dated 29 November 2022

By David Barwick – FRANKFURT (Econostream) – Following is the full transcript of the Econostream interview dated 29 November 2022 with European Central Bank Governing Council member Mario Centeno:

Exclusive: ECB’s Centeno: ‘We Are Probably Close to Neutral Levels … 75BP Is Not a Norm’

- Centeno: If Council ‘sees the need to take policy rates above neutral levels it will do so temporarily’
- Centeno: ‘Very important to underline that any rate hikes above neutral levels are supposed to be temporary’
- Centeno: Rates now closer to normal, but ‘this is no guarantee that further steps are dispensable’
- Centeno: ‘A decision completely aligned with market expectations is not guaranteed’
- Centeno: ‘Adding more predictability and the rationale to our decisions will be key’
- Centeno: ‘Financing conditions are no longer very accommodative’
- Centeno: ‘Our decisions cannot be compared, in size, with those of the Fed, as conditions differ substantially’
- Centeno: Key principles to reduce APP portfolio should exclude any resurgence of fragmentation

ECB’s de Cos: Can’t Say How Far We Will Have to Hike Rates to Achieve Our Objective

By David Barwick – FRANKFURT (Econostream) – It cannot be stated at this point how far the European Central Bank will have to increase interest rates to restore price stability, ECB Governing Council member Pablo Hernández de Cos said Tuesday.

ECB’s Nagel Sticks Closely to Previous Messaging: ‘We Must Not Let up Too Soon’

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Monday reiterated the importance of not letting up in monetary policy’s effort to restore price stability.

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’s Lagarde: Terminal Rate to Be Based on Outlook, Shock Persistence, Wages and Expectations

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Monday said that the terminal rate of the ECB's hiking cycle would depend on the outlook, how long shocks are felt, how key variables respond and the effectiveness of ECB monetary policy.

ECB’s Rehn: Could Enter Recession in Winter; Interest Rates Likely to Rise Further

By David Barwick – FRANKFURT (Econostream) – The euro area could enter recession this winter, but the European Central Bank is likely to continue hiking official interest rates, ECB Governing Council member Olli Rehn reiterated on Monday.

ECB’s de Cos: Risks to Growth to the Downside, Inflation Risks Tilted Upwards

By David Barwick – FRANKFURT (Econostream) – The global economy is facing an increased risk of contraction, with risks to growth pointing downwards and those to inflation up, European Central Bank Governing Council member Pablo Hernández de Cos said Monday.

ECB’s Makhlouf: ‘I Would Expect Interest Rates to Continue to Go up’

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Sunday said that interest rates would have to continue rising even after a hike next month.

Exclusive: ECB Insider: See No Realistic Scenario Where We Reduce Balance Sheet by Much Next Year

- ECB insider on QT: ‘Even if there’s a discussion, we still have fears’
- ECB insider: ‘It can be very fragile on European bond markets’
- ECB insider: ‘We can’t just sell the bonds; it’s impossible’
- ECB insider: Could test APP roll-off at €20bn/month if markets, general economic situation permit
- ECB insider: ‘When you do QT, it is very different than when you do QE’; no symmetry
- ECB insider: Sizeable camp would like to be cautious, not commit ourselves to many things

They Said It: Recent ECB Policymaker Comments on Quantitative Tightening

They Said It: Recent ECB Policymaker Comments on Quantitative Tightening

ECB’s Centeno Qualifies Earlier Warning of Cost of Policy Inaction, Comes out Against 75BP

By David Barwick – FRANKFURT (Econostream) – Days after repeating his warning that the economic cost of monetary policy inaction in the face of high inflation would be greater than the cost of higher interest rates, European Central Bank Governing Council member Mario Centeno on Thursday suggested that neither does he want much policy action.

Exclusive: ECB Insider: ‘I’m Almost Sure’ That December Hike Will Be 50BP

- ECB insider: Hawks can accept slower hiking if terminal rate unaffected and progress made on QT
- ECB insider: Many Governing Council members fear hiking substantially just before a recession
- ECB insider: October’s 75bp hike was already ‘not so easy’
- ECB insider: ECB President Lagarde likely ‘senses that there is no clear consensus for 75’
- ECB insider: See risk of much more political opposition to hiking as soon as some countries enter recession
- ECB insider: Hawks will feel they must ask for 75bp hike even if they expect outcome to be 50bp

ECB’s Knot: Interest Rates to Go Beyond Neutral, to Discuss 2023 Balance Sheet Reduction

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot on Thursday said that official interest rates would exceed neutrality and that the Council would next month discuss the reduction in 2023 of the ECB’s balance sheet.

ECB’s Makhlouf: ‘Global Financial Markets Are Fraught with Risk’; Must Remain Vigilant

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Thursday said that financial markets around the world were susceptible to disruptions in the wake of global monetary policy tightening.