European Central Bank Press conference comparison — 10 March 2022 vs 9 June 2022
This European Central Bank press conference comparison covers 10 March 2022 and 9 June 2022. Overall, the newer document was more hawkish. The June 2022 ECB statement marks a decisive hawkish pivot relative to March, driven by sharply higher inflation projections and a shift from conditional easing to explicit rate hike commitments. This signals that the ECB is prioritising inflation control over growth concerns, with the next decision likely delivering a July hike and potentially a 50bp move in September if inflation persists.
What changed
More hawkish. The June 2022 ECB statement marks a decisive hawkish pivot relative to March, driven by sharply higher inflation projections and a shift from conditional easing to explicit rate hike commitments. This signals that the ECB is prioritising inflation control over growth concerns, with the next decision likely delivering a July hike and potentially a 50bp move in September if inflation persists.
- Inflation — More hawkish. Inflation assessment escalated from confident in achieving target to emphasising undesirably high and persistent inflation with upside risks, marking a hawkish shift.
- Labour Market — More hawkish. Labour market characterisation moved from lacking wage pressure to robust demand and rising wages, signalling a hawkish turn.
- Rate Path — More hawkish. Forward guidance shifted from cautious data-dependent tapering with optional timing to explicit 25bp July hike and conditional larger September hike, a clear hawkish pivot.
- Balance Sheet — More hawkish. Balance sheet stance tightened from gradual APP tapering to a definitive end of net asset purchases, indicating a hawkish reduction in accommodation.
Key wording
The Russia-Ukraine war will have a material impact on economic activity and inflation through higher energy and commodity prices, the disruption of international commerce and weaker confidence.
The Governing Council sees it as increasingly likely that inflation will stabilise at its two per cent target over the medium term.
Monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June.
If the incoming data support the expectation that the medium-term inflation outlook will not weaken even after the end of our net asset purchases, the Governing Council will conclude net purchases under the APP in the third quarter.
Various measures of longer-term inflation expectations derived from financial markets and from surveys stand at around two per cent.
The risks to the economic outlook have increased substantially with the Russian invasion of Ukraine and are tilted to the downside.
Risks relating to the pandemic have declined but the war continues to be a significant downside risk to growth. In particular, a major risk would be a further disruption in the energy supply to the euro area
The new staff projections foresee annual inflation at 6.8 per cent in 2022, before it is projected to decline to 3.5 per cent in 2023 and 2.1 per cent in 2024 – higher than in the March projections. This means that headline inflation at the end of the projection horizon is projected to be slightly above our target.
we decided to end net asset purchases under our asset purchase programme (APP) as of 1 July 2022. we intend to raise the key ECB interest rates by 25 basis points at our July monetary policy meeting.
Looking further ahead, we expect to raise the key ECB interest rates again in September. If the medium-term inflation outlook persists or deteriorates, a larger increment will be appropriate at our September meeting.
Inflation is undesirably high and is expected to remain above our target for some time.
The risks surrounding inflation are primarily on the upside.
Official documents
Background reading
Related
10 March 2022 press conference · 9 June 2022 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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