European Central Bank Press conference comparison — 15 June 2023 vs 14 September 2023
This European Central Bank press conference comparison covers 15 June 2023 and 14 September 2023. Overall, the newer document was more dovish. The ECB raised rates by 25bp but the overall tone turned dovish as forward guidance shifted to a 'sufficiently long duration' stance and acknowledged dissent and weaker growth. The next decision is likely a pause unless inflation surprises upward.
What changed
More dovish. The ECB raised rates by 25bp but the overall tone turned dovish as forward guidance shifted to a 'sufficiently long duration' stance and acknowledged dissent and weaker growth. The next decision is likely a pause unless inflation surprises upward.
- Inflation — More dovish. Inflation assessment slightly less hawkish: prior emphasised persistent inflation and upside risks, while current highlights significant progress and signs of profit squeeze, though still hawkish overall.
- Labour Market — Little changed. Labour market language remains broadly unchanged with both documents highlighting strong conditions and wage growth, no material shift.
- Rate Path — More dovish. Rate path guidance shifted dovishly: prior included explicit July hike guidance and further tightening commitment; current signals rates may have reached peak and longer duration, with growing dissent and growth downgrades.
- Balance Sheet — Little changed. Balance sheet stance is neutral: prior had active tightening via TLTRO and APP, but current contains no new balance sheet signals, implying no change.
Key wording
Inflation has been coming down but is projected to remain too high for too long.
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.
Upside risks to inflation include potential renewed upward pressures on the costs of energy and food, also related to Russia’s war against Ukraine. A lasting rise in inflation expectations above our target, or higher than anticipated increases in wages or profit margins, could also drive inflation higher, including over the medium term. Recent wage agreements in a number of countries have added to the upside risks to inflation.
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.
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.
Back in October we were at 10.6%. We are down to 5.3% now
Official documents
Background reading
Related
15 June 2023 press conference · 14 September 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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