European Central Bank Press conference comparison — 27 July 2023 vs 14 September 2023
This European Central Bank press conference comparison covers 27 July 2023 and 14 September 2023. Overall, the newer document was mixed. The ECB delivered a 25bp hike but signaled rates may have peaked, with forward guidance emphasizing duration over further hikes. Dovish dissent and growth downgrade tilt the risk balance toward an earlier end to tightening, leaving next move data-dependent and likely a hold.
What changed
Mixed. The ECB delivered a 25bp hike but signaled rates may have peaked, with forward guidance emphasizing duration over further hikes. Dovish dissent and growth downgrade tilt the risk balance toward an earlier end to tightening, leaving next move data-dependent and likely a hold.
- Inflation — Little changed. Inflation still described as too high for too long, but progress noted; no material shift from prior's mixed stance.
- Labour Market — More hawkish. Labour market strength and wage growth highlighted for the first time, adding a new hawkish concern.
- Rate Path — More dovish. Forward guidance shifts to rates at levels that can be maintained for long duration, with dissent and growth downgrade signaling peak near.
- Balance Sheet — Little changed. No explicit balance sheet passages in current document; prior neutral/dovish content unchanged.
Key wording
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 set at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our two per cent medium-term target.
Our future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our two per cent medium-term target. We will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.
Upside risks to inflation include potential renewed upward pressures on the costs of energy and food, also related to Russia's unilateral withdrawal from the Black Sea Grain Initiative.
we might hike and we might hold, and what is decided in September is not definitive.
we are definitely seeing monetary policy being transmitted and being transmitted strongly. That’s obviously the case for the first leg and it is now also beginning to be the case in the second one.
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
Back in October we were at 10.6%. We are down to 5.3% now
Based on our current assessment, we consider that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our target.
Based on our current assessment, we consider that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our target. Our future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary.
Official documents
Background reading
Related
27 July 2023 press conference · 14 September 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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