European Central Bank Statement comparison — 12 September 2019 vs 12 December 2019

This European Central Bank statement comparison covers 12 September 2019 and 12 December 2019. Overall, the newer document was broadly unchanged. The December ECB statement is a hold after the significant easing package in September. It confirms the ongoing measures but does not add new accommodation, signalling that the Governing Council is assessing the impact of previous actions before deciding on further steps.

What changed

Broadly unchanged. The December ECB statement is a hold after the significant easing package in September. It confirms the ongoing measures but does not add new accommodation, signalling that the Governing Council is assessing the impact of previous actions before deciding on further steps.

Inflation — Little changed. No explicit inflation assessment is provided in either document; both focus on policy actions and forward guidance.
Labour Market — Little changed. Labour market is not discussed in the key passages of either document, so no shift is detected.
Rate Path — Little changed. The December statement holds rates unchanged after September's cut, maintaining the same lower-for-longer forward guidance without reinforcing or softening the dovish signal.
Balance Sheet — Little changed. The QE restart announced in September is confirmed as ongoing at the same pace, with reinvestment commitment unchanged; no new balance sheet measures are introduced.

Key wording

12 September 2019

The interest rate on the deposit facility will be decreased by 10 basis points to -0.50%.
rate path: Direct cut signals easing bias.

The Governing Council now expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
rate path: Lower-for-longer commitment; no rate hikes before inflation converges.

Net purchases will be restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion as from 1 November.
rate path: QE restart provides additional accommodation.

Reinvestments of the principal payments from maturing securities purchased under the APP will continue, in full, for an extended period of time past the date when the Governing Council starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
rate path: Reinvestment beyond rate hikes signals prolonged accommodation.

The interest rate in each operation will now be set at the level of the average rate applied in the Eurosystem’s main refinancing operations over the life of the respective TLTRO. For banks whose eligible net lending exceeds a benchmark, the rate applied in TLTRO III operations will be lower, and can be as low as the average interest rate on the deposit facility prevailing over the life of the operation.
rate path: TLTRO III terms eased; rates can go as low as -0.50% for qualifying banks.

12 December 2019

At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.
rate path: No change in rates, as expected.

The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
rate path: Open-ended guidance with 'or lower' and strict condition on inflation, implying rates on hold for an extended period.

On 1 November net purchases were restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion.
rate path: Confirms ongoing QE at current pace.

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
rate path: Reinvestment commitment extends well beyond first rate hike, ensuring sustained accommodation.

Official documents

Background reading

12 September 2019 statement · 12 December 2019 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology