European Central Bank Press conference comparison — 15 December 2022 vs 16 March 2023

This European Central Bank press conference comparison covers 15 December 2022 and 16 March 2023. Overall, the newer document was more dovish. The ECB delivered a 50bp hike as expected but the accompanying rhetoric softened significantly compared to December. The emphasis shifted from a relentless tightening path to a data-dependent approach contingent on financial stability, signalling a potential pause or slowdown in coming meetings.

What changed

More dovish. The ECB delivered a 50bp hike as expected but the accompanying rhetoric softened significantly compared to December. The emphasis shifted from a relentless tightening path to a data-dependent approach contingent on financial stability, signalling a potential pause or slowdown in coming meetings.

Inflation — Little changed. Both documents describe inflation as persistently high with upside risks; no material shift in the inflation assessment.
Labour Market — Little changed. Prior labour market signal (rock bottom unemployment) is not reiterated in current document; no material change in stance.
Rate Path — More dovish. Prior unambiguously hawkish with explicit guidance for continued 50bp hikes; current introduces financial stability concerns, internal dissent, and data-dependency that softens forward guidance.
Balance Sheet — More dovish. Prior confirmed the start of quantitative tightening at a measured pace; current emphasizes monitoring financial tensions and leaves pace unchanged, with no discussion of acceleration.

Key wording

15 December 2022

The Governing Council today decided to raise the three key ECB interest rates by 50 basis points and, based on the substantial upward revision to the inflation outlook, we expect to raise them further.
rate path: Confirms 50bp hike and signals further increases.

In particular, we judge that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to our two per cent medium-term target.
rate path: Strongly hints at continued hiking at a steady pace.

we judge that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to our two per cent medium-term target.
rate path: Indicates further hikes at 50bp pace, more tightening ahead.

We judge that interest rates will still have to rise significantly at a steady pace, to reach levels that are sufficiently restrictive to ensure a timely return of inflation to our 2% medium-term target. And then: Keeping interest rates at restrictive levels will, over time, etc... So this is the fourth message that we are releasing in that paragraph, which is that we will sustain the course.
rate path: Explicit forward guidance: rates must rise significantly and stay restrictive for an extended period.

Our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
rate path: Reinforces data-dependence, leaving flexibility.

From the beginning of March 2023 onwards, the asset purchase programme (APP) portfolio will decline at a measured and predictable pace, as the Eurosystem will not reinvest all of the principal payments from maturing securities. The decline will amount to €15 billion per month on average until the end of the second quarter of 2023 and its subsequent pace will be determined over time.
balance sheet: Starts quantitative tightening at a gradual pace.

16 March 2023

Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points, in line with our determination to ensure the timely return of inflation to our two per cent medium-term target.
rate path: 50bp hike confirms continued tightening despite financial tensions.

the Governing Council today decided to increase the three key ECB interest rates by 50 basis points
rate path: Rate hike signals continued tightening despite banking stress.

The elevated level of uncertainty reinforces the importance of a data-dependent approach to our policy rate decisions, which will be determined by our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.
rate path: Data-dependent guidance leaves optionality for future moves.

if our baseline was to persist when the uncertainty reduces, we know that we have a lot more ground to cover.
rate path: Hawkish conditional: further hikes likely if stress abates and baseline holds.

the projections that we have do not incorporate any of the most recent developments and certainly not the impact of the most recent financial tensions that we have observed on the markets.
rate path: Dovish caveat: elevated uncertainty and outdated projections weaken inflation outlook.

We are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area.
balance sheet: Pledge to address financial stability risks flags potential easing.

Official documents

Background reading

15 December 2022 press conference · 16 March 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology