European Central Bank Press conference comparison — 16 March 2023 vs 4 May 2023
This European Central Bank press conference comparison covers 16 March 2023 and 4 May 2023. Overall, the newer document was broadly unchanged. The ECB continues tightening but with a smaller 25bp hike, matching a slight moderation in inflation rhetoric while labour market strength persists. Strong forward guidance ('not pausing', 'more ground to cover') suggests another 25bp hike is likely at the next meeting unless data deteriorates significantly.
What changed
Broadly unchanged. The ECB continues tightening but with a smaller 25bp hike, matching a slight moderation in inflation rhetoric while labour market strength persists. Strong forward guidance ('not pausing', 'more ground to cover') suggests another 25bp hike is likely at the next meeting unless data deteriorates significantly.
- Inflation — Little changed. Inflation language remains hawkish with continued emphasis on elevation and upside risks; no material softening.
- Labour Market — Little changed. Labour market assessment remains consistent: historically low unemployment and strong conditions.
- Rate Path — Little changed. Rate hike pace reduced from 50bp to 25bp but strong forward guidance of further hikes maintains hawkish posture.
- Balance Sheet — Little changed. Balance sheet policy unchanged; QT pace and scope confirmed.
Key wording
Inflation is projected to remain too high for too long.
Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points
the Governing Council today decided to increase the three key ECB interest rates by 50 basis points
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.
The euro area banking sector is resilient, with strong capital and liquidity positions
the labour market remains strong, despite the weakening of economic activity. Employment grew by 0.3 per cent in the fourth quarter of 2022 and the unemployment rate stayed at its historical low of 6.6 per cent in January 2023.
The inflation outlook continues to be too high for too long.
the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
At the same time, our past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain.
Our future decisions will ensure that the policy 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 APP is let to run down gradually over the course of time, which will be an average of 25 billion per month that will not be reinvested, roughly.
the unemployment rate falling to a new historical low of 6.5 per cent in March.
Official documents
Background reading
Related
16 March 2023 press conference · 4 May 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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