European Central Bank Press conference comparison — 8 September 2022 vs 27 October 2022
This European Central Bank press conference comparison covers 8 September 2022 and 27 October 2022. Overall, the newer document was more hawkish. The ECB delivered another 75bp hike but tempered its forward guidance, shifting from explicit pre-commitment to data-dependence while acknowledging recession risks. This suggests the tightening cycle continues but at a potentially slower and more conditional pace, with balance sheet tools now actively deployed.
What changed
More hawkish. The ECB delivered another 75bp hike but tempered its forward guidance, shifting from explicit pre-commitment to data-dependence while acknowledging recession risks. This suggests the tightening cycle continues but at a potentially slower and more conditional pace, with balance sheet tools now actively deployed.
- Inflation — Little changed. Inflation assessment remains hawkish with persistent above-target pressures, while a note on recession risk introduces a balancing element; no material shift in overall stance.
- Labour Market — More hawkish. Prior emphasis on labor market slack is replaced by reference to strong labor conditions, representing a hawkish shift in the characterization of wage and employment dynamics.
- Rate Path — More dovish. Forward guidance has been softened from explicit multi-meeting hike commitments to a more data-dependent posture, with acknowledgment of downside growth risks, marking a dovish pivot relative to the prior document's aggressive guidance.
- Balance Sheet — More hawkish. The introduction of TLTRO III rate adjustments and balance sheet normalization measures represents a new hawkish channel for tightening absent from the prior document.
Key wording
Based on our current assessment, over the next several meetings we expect to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations.
Our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
Looking ahead, ECB staff have significantly revised up their inflation projections and inflation is now expected to average 8.1 per cent in 2022, 5.5 per cent in 2023 and 2.3 per cent in 2024.
The risks to the inflation outlook are primarily on the upside.
we raised the three key ECB interest rates by 75 basis points today, and expect to raise interest rates further, because inflation remains far too high and is likely to stay above our target for an extended period.
So it's a really dark downside scenario but it's one that concludes to a 2023 recession. But it is the downside scenario; it is not the baseline.
We took today’s decision, and expect to raise interest rates further, to ensure the timely return of inflation to our two per cent medium-term inflation target.
today we have raised the three key ECB interest rates by 75 basis points, and expect to raise interest rates further, to ensure the timely return of inflation to our medium-term target.
Inflation remains far too high and will stay above our target for an extended period.
We are very much and deliberately turning our back to forward guidance, which is not helpful in the current circumstances given the level of uncertainty that we have pretty much all around.
We are not done yet. There is more ground to cover
We have made progress on that normalisation path, but that we still have ground to cover, okay? As we have made that progress, I am also telling you that the ultimate destination that we want to reach is the rate that will deliver the 2% inflation target in the medium term. That rate, by the way, is not necessarily the rate at which we will have considered that normalisation is completed. It may well have to go beyond that, but what I am also telling you is that we are going to decide meeting-by-meeting on the basis of data and using the three categories of considerations that I have mentioned. So it might well be several meetings.
Official documents
Background reading
Related
8 September 2022 press conference · 27 October 2022 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.