European Central Bank Press conference comparison — 14 September 2023 vs 26 October 2023

This European Central Bank press conference comparison covers 14 September 2023 and 26 October 2023. Overall, the newer document was more dovish. The October 2023 ECB statement marks a clear dovish shift by pausing rate hikes, softening labour market language, and acknowledging financial stability risks, while maintaining a hawkish inflation narrative. The next decision is likely data-dependent, with no imminent cuts signaled.

What changed

More dovish. The October 2023 ECB statement marks a clear dovish shift by pausing rate hikes, softening labour market language, and acknowledging financial stability risks, while maintaining a hawkish inflation narrative. The next decision is likely data-dependent, with no imminent cuts signaled.

Inflation — Little changed. Inflation assessment remains broadly unchanged, with both documents highlighting persistent price pressures and only modest progress.
Labour Market — More dovish. Labour market language softened from unambiguously hawkish (strong growth, wage pressures) to mixed (still tight but showing signs of weakening).
Rate Path — More dovish. The ECB paused its tightening cycle after 10 consecutive hikes, with forward guidance emphasising rates staying high for long but leaving the door open for further data-dependent moves.
Balance Sheet — More dovish. Current document introduces explicit financial stability concerns from higher yields, a risk not flagged in the prior meeting.

Key wording

14 September 2023

Inflation continues to decline but is still expected to remain too high for too long.
inflation: Inflation still too high, justifying further action.

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.
rate path: Rate hike of 25bp, confirming tightening bias.

the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
rate path: 25bp hike confirms tightening, but markets are more focused on the end of the cycle.

the Governing Council today decided to raise the three key ECB interest rates by 25 basis points
rate path: Confirms the 25 bp hike, the main policy decision.

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.
rate path: Signals rates at or near peak, but need to keep them high for long.

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.
rate path: Signals rates may be at peak but need to stay high for long; conditionality on data.

26 October 2023

Inflation is still expected to stay too high for too long, and domestic price pressures remain strong.
inflation: Emphasises persistent inflation; supports case for keeping rates restrictive.

The Governing Council today decided to keep the three key ECB interest rates unchanged.
rate path: Hold decision as widely expected; no surprise.

Based on our current assessment, we consider that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal.
rate path: Signals rates have peaked and need to stay high; rates investors should expect no cuts soon.

Based on our current assessment, we consider that rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our target.
rate path: Signals rates will stay high for 'sufficiently long' to bring down inflation.

Even having a discussion on a cut is totally premature.
rate path: Explicitly dismisses any discussion of rate cuts as premature.

We know that there is still more to come.
rate path: Indicates further tightening effects from past rate hikes are still in the pipeline, which may reduce the need for additional hikes.

Official documents

Background reading

14 September 2023 press conference · 26 October 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology