The European Central Bank (ECB) officials, including Klaas Knot, Mario Centeno, and Isabel Schnabel, have made several statements regarding inflation, monetary policy, and the economic outlook. Knot emphasized that the ECB still has a long road ahead on disinflation and that financial stability is crucial for price stability. However, he also stated that the ECB is in a good place now and stands ready to adjust rates further if disinflation stalled. Knot mentioned that a lot of the tightening effects are still in the pipeline and that restrictive policies will be needed for some time. He also expressed the goal of reaching the inflation target by 2025. Centeno expressed confidence that current interest rate levels will bring inflation back to the 2% target. Schnabel highlighted the need to be cautious in using instruments and emphasized that monetary patience is more important than activism at the present. The ECB's accounts revealed that a solid majority of members expressed support for the 25 basis points rate increase, and there were discussions about maintaining rates at their current levels. The accounts also mentioned the upward revisions to the headline inflation projections for the first two years. Overall, the ECB officials acknowledged the challenges of disinflation but expressed confidence in the effectiveness of their policies and readiness to take further action if necessary.
🔴 ECB'S ACCOUNT: CORE INFLATION EXPECTED AT 5.1% IN 2023, BEFORE FALLING TO 2.9% IN 2024 AND 2.2% IN 2025.
🔴 ECB'S ACCOUNT: WE EXPECT HEADLINE INFLATION TO DECREASE FROM 8.4% IN 2022 TO AN AVERAGE OF 5.6% FOR 2023, 3.2% FOR 2024 AND 2.1% FOR 2025.
🔴 ECB'S ACCOUNTS: A RANGE OF MODEL-BASED SIMULATIONS SUGGESTED THAT A DEPOSIT FACILITY RATE IN THE REGION OF 3.75% TO 4.00% SHOULD BE CONSISTENT WITH A RETURN OF INFLATION TO TARGET.
🔴 ECB'S ACCOUNTS: THE DECISION BETWEEN RAISING RATES AND PAUSING WAS A CLOSE CALL, AND THAT TACTICAL CONSIDERATIONS ALSO PLAYED A ROLE.
🔴 ECB ACCOUNTS: FOR SEPTEMBER 2023, RESPONDENTS WERE ALMOST EVENLY SPLIT, WITH A SLIGHT MAJORITY OF 53% EXPECTING A PAUSE AND 47% EXPECTING ANOTHER INTEREST RATE HIKE.
🔴 ECB'S ACCOUNTS: THE DEPOSIT FACILITY RATE IS IN THE REGION OF 3.75% TO 4.00%, AS LONG AS IT WAS UNDERSTOOD AS BEING MAINTAINED FOR A SUFFICIENTLY LONG DURATION, SHOULD BE CONSISTENT WITH A RETURN OF INFLATION TO TARGET.
🔴 ECB'S ACCOUNTS: HAVING BEEN ABLE TO KEEP INFLATION EXPECTATIONS ANCHORED, DESPITE THE LONG PERIOD IN WHICH INFLATION HAD BEEN ABOVE TARGET, THIS WAS SEEN AS A MAJOR ACHIEVEMENT.
🔴 ECB'S ACCOUNTS: SOME MEMBERS EXPRESSED A PREFERENCE FOR MAINTAINING RATES AT THEIR CURRENT LEVELS.
🔴 ECB'S ACCOUNTS: NOT HIKING COULD ALSO SEND A SIGNAL OF THE GOVERNING COUNCIL BEING MORE CONCERNED ABOUT THE ECONOMY AND A POTENTIAL RECESSION THAN TOO HIGH INFLATION.
🔴 ECB'S ACCOUNTS: A PAUSE COULD GIVE RISE TO SPECULATION THAT THE TIGHTENING CYCLE WAS OVER.
🔴 ECB'S ACCOUNTS: EMPHASIS WAS ALSO PLACED ON THE UPWARD REVISIONS TO THE HEADLINE INFLATION PROJECTIONS FOR THE FIRST TWO YEARS.
🔴 ECB'S ACCOUNTS: A SOLID MAJORITY OF MEMBERS EXPRESSED SUPPORT FOR THE 25 BPS RATE INCREASE.
ECB Governing Council member Mario Centeno said he’s confident that current interest rate levels will bring inflation back to the 2% target https://t.co/VzJKIc8xeD
ECB Governing Council member Mario Centeno said he’s confident that current interest rate levels will bring inflation back to the 2% target https://t.co/dLWv9gxCR4
🔴 ECB'S VILLEROY: MONETARY PATIENCE IS MORE IMPORTANT THAN ACTIVISM AT THE PRESENT.
🔴 ECB'S VILLEROY: THE LEVEL OF ECB RATES AT THE PRESENT IS APPROPRIATE.
🔴 ECB'S WUNSCH: THERE ARE NO STRONG REASONS NOW TO CONTINUE REINVESTMENTS.
🔴 ECB'S WUNSCH: OIL PRICES ARE ONE UPSIDE RISK TO INFLATION.
🔴 ECB'S WUNSCH: IF INFLATION MEETS THE FORECAST, NO MORE HIKES ARE NEEDED.
🔴 ECB'S WUNSCH: MAYBE WE'VE REACHED THE PEAK IN INTEREST RATES.
🔴 ECB'S WUNSCH: WE HAVE TO BE CAUTIOUS IN USING INSTRUMENTS.
🔴 ECB'S WUNSCH: WE HAVE TO LIVE WITH CURRENT UNCERTAINTY.
🔴 ECB'S CENTENO: WE NEED TO BE NIMBLE IN ADJUSTING POLICY TO DATA.
🔴 ECB'S CENTENO: WE NEED TO MONITOR THE PRICE OF OIL.
🔴 ECB'S CENTENO: WE NEED TO PRESERVE LABOR MARKET STABILITY.
🔴 ECB'S CENTENO: WE NEED TO BE PREDICTABLE ON POLICY.
🔴 ECB'S VUJCIC: THE ECONOMY IS FACING STAGNATION RATHER THAN RECESSION.
🔴 ECB'S VUJCIC: IF THE OUTLOOK HOLDS, NO MORE RATE HIKES ARE NEEDED.
🔴 ECB'S DE COS: IT'S PREMATURE TO DISCUSS RATE CUTS.
🔴 ECB'S DE COS: A SIGNIFICANT PART OF TRANSMISSION IS STILL TO COME.
🔴 ECB'S DE COS: DIFFERENT SHOCKS MAY REQUIRE A DIFFERENT RESPONSE.
🔴 ECB'S DE COS: BUT THE STATEMENT IS CONDITIONAL AND BASED ON CURRENT INFORMATION.
ECB Governing Council member Klaas Knot says inflation shocks are now in retreat, though officials stand ready to step in again if needed https://t.co/GCTT6y5714
ECB Governing Council member Klaas Knot says inflation shocks are now in retreat, though officials stand ready to step in again if needed https://t.co/0xhpN4PTwT
ECB Governing Council member Klaas Knot says inflation shocks are now in retreat, though officials stand ready to step in again if needed https://t.co/G8PRH7XVtO
ECB has long road on disinflation but in a good place now: Knot https://t.co/CdSDRsC6P8 https://t.co/HFhjRaOGlx
🔴 ECB'S DE COS: WE DON'T WANT TO PRE-COMMIT TO A FUTURE RATE PATH.
ECB Says Consumer Inflation Expectations Rose Slightly https://t.co/QRvUVV4DNC
ECB Says Consumer Inflation Expectations Rose Slightly https://t.co/amUOWQ6CEG
⚠️ ECB HAS LONG ROAD ON DISINFLATION BUT IN A GOOD PLACE NOW: KNOT Full Story → https://t.co/8YiIIFshy9 https://t.co/XE6Gz1KHz5
🔴 ECB'S KNOT: WE HAVE A DISINFLATION TRAJECTORY AHEAD OF US.
🔴 ECB'S KNOT: FINANCING CONDITIONS RESPONDED VERY RAPIDLY TO RATE HIKES.
🔴 ECB'S KNOT: A LOT OF THE TIGHTENING EFFECTS ARE STILL IN THE PIPELINE.
🔴 ECB'S KNOT: IT WOULD BE AN "ACCEPTABLE RETURN" TO REACH THE INFLATION GOAL BY 2025.
🔴 ECB'S KNOT: WE STAND READY TO ADJUST RATES FURTHER IF DISINFLATION STALLED.
🔴 ECB'S KNOT: POLICY IS IN A GOOD PLACE NOW.
🔴 ECB'S KNOT: WE HAVE A LONG ROAD AHEAD ON DISINFLATION.
🔴 ECB'S KNOT: FINANCIAL STABILITY IS A CRUCIAL CONDITION FOR PRICE STABILITY.
🔴 ECB'S KNOT: RESTRICTIVE POLICIES WILL BE NEEDED FOR SOME TIME.
🔴 ECB'S KNOT: THE PASS THROUGH OF SHOCKS TO SERVICES PRICES TAKES MORE TIME.
🔴 ECB'S KNOT: THE MEDIUM TERM GROWTH OUTLOOK IS MORE FAVOURABLE.