European Central Bank Statement comparison — 10 June 2021 vs 9 September 2021
This European Central Bank statement comparison covers 10 June 2021 and 9 September 2021. Overall, the newer document was more hawkish. The September 2021 statement marks a hawkish tilt on balance sheet policy with the first explicit PEPP taper, while rate forward guidance remains firmly dovish. The mixed signal suggests the ECB is beginning to normalise emergency measures but remains committed to low rates for an extended period, pointing to a gradual unwinding of PEPP before any rate discussion.
What changed
More hawkish. The September 2021 statement marks a hawkish tilt on balance sheet policy with the first explicit PEPP taper, while rate forward guidance remains firmly dovish. The mixed signal suggests the ECB is beginning to normalise emergency measures but remains committed to low rates for an extended period, pointing to a gradual unwinding of PEPP before any rate discussion.
- Inflation — Little changed. No direct inflation assessment in key passages; overall stance unchanged.
- Labour Market — Little changed. Labour market not referenced in key passages; no shift.
- Rate Path — Little changed. Forward guidance on rates remains dovish with same low-for-long language; no change.
- Balance Sheet — More hawkish. First explicit taper of PEPP pace signals reduced emergency support, a hawkish shift from prior neutrality.
Key wording
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.
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.
Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects net purchases under the PEPP over the coming quarter to continue to be conducted at a significantly higher pace than during the first months of the year.
Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion.
The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry.
Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the pandemic emergency purchase programme (PEPP) than in the previous two quarters.
In support of its symmetric two per cent inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term. This may also imply a transitory period in which inflation is moderately above target.
The Governing Council continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.
The Governing Council will continue to conduct net asset purchases under the PEPP with a total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.
The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its two per cent target over the medium term.
Official documents
Background reading
Related
10 June 2021 statement · 9 September 2021 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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