European Central Bank Press conference comparison — 4 May 2023 vs 14 September 2023
This European Central Bank press conference comparison covers 4 May 2023 and 14 September 2023. Overall, the newer document was more dovish. Overall, the ECB shifts from a resolutely hawkish posture in May to a more cautious and data-dependent stance in September, with rates now seen as potentially sufficient but needing to be held high. The next decision is likely a hold, with emphasis on duration rather than further hikes.
What changed
More dovish. Overall, the ECB shifts from a resolutely hawkish posture in May to a more cautious and data-dependent stance in September, with rates now seen as potentially sufficient but needing to be held high. The next decision is likely a hold, with emphasis on duration rather than further hikes.
- Inflation — More dovish. The current document emphasizes notable progress in reducing inflation (from 10.6% to 5.3%) and signs of profit squeeze, softening the prior acute urgency despite still elevated levels.
- Labour Market — Little changed. Both documents characterize the labour market as strong with record-low unemployment and rising wages; no material shift in description.
- Rate Path — More dovish. The current document introduces forward guidance suggesting rates may be at or near peak if maintained long enough, acknowledges dissent for a pause, and downgrades growth forecasts, a clear dovish shift from the prior 'not pausing' and 'more ground to cover' language.
- Balance Sheet — Little changed. Balance sheet policy is not addressed in the current document, implying no announced change from the prior QT pace and scope.
Key wording
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.
Headline inflation has declined over recent months, but underlying price pressures remain strong.
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 unemployment rate falling to a new historical low of 6.5 per cent in March.
Inflation continues to decline but is still expected to remain too high for too long.
In order to reinforce progress towards our target, the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
Back in October we were at 10.6%. We are down to 5.3% now
the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
the Governing Council today decided to raise the three key ECB interest rates by 25 basis points
the labour market is still going strongly, the employees’ wages are growing, the employee remuneration is still increasing at 5.5% ... and the lowest unemployment rates we have ever had.
Official documents
Background reading
Related
4 May 2023 press conference · 14 September 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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