European Central Bank Press conference comparison — 30 April 2020 vs 10 September 2020
This European Central Bank press conference comparison covers 30 April 2020 and 10 September 2020. Overall, the newer document was more dovish. The ECB maintained its highly accommodative stance but shifted from active easing measures to a monitoring phase, with heightened focus on euro appreciation and inflation risks. The next decision likely holds rates steady while continuing PEPP purchases at the current pace.
What changed
More dovish. The ECB maintained its highly accommodative stance but shifted from active easing measures to a monitoring phase, with heightened focus on euro appreciation and inflation risks. The next decision likely holds rates steady while continuing PEPP purchases at the current pace.
- Inflation — More dovish. Inflation outlook remains subdued, with new emphasis on euro appreciation as an additional downside risk.
- Labour Market — Little changed. Labour market is not addressed in current key passages; prior deterioration is no longer explicitly highlighted.
- Rate Path — More dovish. Forward guidance retains strong accommodative bias with explicit monitoring of exchange rate, but no new easing actions announced.
- Balance Sheet — Little changed. Balance sheet stance unchanged: reaffirmed PEPP envelope and full usage, but no expansion beyond previously announced.
Key wording
Survey indicators for consumer and business sentiment have plunged, suggesting a sharp contraction in economic growth and a profound deterioration in labour market conditions.
Inflation has declined as a result of the sharp fall in oil prices and slightly lower HICP inflation excluding energy and food.
Accordingly, the Governing Council decided today to further ease the conditions on our targeted longer-term refinancing operations (TLTRO III).
the severe risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the coronavirus pandemic.
We expect them to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
Given the highly uncertain duration of the pandemic, the likely extent and duration of the imminent recession and the subsequent recovery are difficult to predict.
In the near term price pressures will remain subdued owing to weak demand, lower wage pressures and the appreciation of the euro exchange rate, despite some upward price pressures related to supply constraints.
We will continue our purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion.
Overall, the balance of risks to the euro area growth outlook is seen to remain on the downside.
We will keep the key ECB interest rates unchanged. We expect them to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
the appreciation of the euro exercises a negative pressure on prices, we have to monitor carefully such a matter.
We will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over.
Official documents
Background reading
Related
30 April 2020 press conference · 10 September 2020 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
The Cadence Brief
The one number that moved central bank pricing — delivered each weekday morning.