European Central Bank Press conference comparison — 2 February 2023 vs 15 June 2023
This European Central Bank press conference comparison covers 2 February 2023 and 15 June 2023. Overall, the newer document was more hawkish. The ECB continues tightening but shifts to a slower rate hike pace while stepping up balance sheet reduction, reflecting a nuanced but still restrictive stance. The explicit July hike guidance suggests another 25bp move, but the conditional language leaves flexibility for a pause after summer.
What changed
More hawkish. The ECB continues tightening but shifts to a slower rate hike pace while stepping up balance sheet reduction, reflecting a nuanced but still restrictive stance. The explicit July hike guidance suggests another 25bp move, but the conditional language leaves flexibility for a pause after summer.
- Inflation — More hawkish. Inflation remains too high and persistent despite some decline, with upside risks highlighted, though a dovish nuance appears in downplaying wage-price spiral.
- Labour Market — More hawkish. Labour market strength is more explicitly linked to wage-driven inflation pressures, intensifying the hawkish concern.
- Rate Path — More dovish. The pace of hikes slows from 50bp to 25bp, and forward guidance becomes conditional on baseline, signaling a less aggressive near-term trajectory.
- Balance Sheet — More hawkish. Balance sheet tightening accelerates through TLTRO repayment and APP runoff, adding a hawkish channel.
Key wording
Accordingly, the Governing Council today decided to raise the three key ECB interest rates by 50 basis points and we expect to raise them further.
In view of the underlying inflation pressures, we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March and we will then evaluate the subsequent path of our monetary policy.
Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations.
The unemployment rate remained at its historical low of 6.6 per cent in December 2022.
Price pressures remain strong, partly because high energy costs are spreading throughout the economy.
we today decided to raise the three key ECB interest rates by 50 basis points and we expect to raise them further.
The Governing Council therefore today decided to raise the three key ECB interest rates by 25 basis points.
The Governing Council therefore today decided to raise the three key ECB interest rates by 25 basis points
Our future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our two per cent medium-term target and will be kept at those levels for as long as necessary.
The labour market remains a source of strength. Almost a million new jobs were added in the first quarter of the year and the unemployment rate stood at its historical low of 6.5 per cent in April.
Inflation has been coming down but is projected to remain too high for too long.
I can tell you that, barring a material change to our baseline, it is very likely the case that we will continue to increase rates in July
Official documents
Background reading
Related
2 February 2023 press conference · 15 June 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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