EZ ECB Monetary Policy Meeting Accounts
It's a detailed record of the ECB Governing Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates;
Source first released in Feb 2015;
- History
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- EZ ECB Monetary Policy Meeting Accounts News
- From ecb.europa.eu|May 10, 2024
Ms Schnabel noted that since the Governing Council’s previous monetary policy meeting on 6-7 March 2024 financial markets had started to price in some divergence between the monetary policy paths expected in the euro area and in the United States. This was reflected in a widening interest rate differential. In the United States, a series of solid economic data releases had signalled the US economy’s resilience to the current levels of interest rates. This had led financial markets to expect the timing of a first interest rate cut to be later and the overall extent of monetary policy easing to be less than previously anticipated. post: ECB ACCOUNTS: THE WIDELY AGREED PRICE DATA IS IN LINE WITH THE MID-TERM PATH. post: ECB ACCOUNTS: UNDERLYING INFLATION PROGRESS WAS GENERALLY SEEN. post: ECB ACCOUNTS: IT WAS SEEN AS PLAUSIBLE THAT THE GOVERNING COUNCIL WOULD BE IN A POSITION TO START EASING MONETARY POLICY RESTRICTIONS AT THE JUNE MEETING.
- From ecb.europa.eu|Apr 4, 2024
Ms Schnabel noted that, since the Governing Council’s previous monetary policy meeting on 24-25 January 2024, monetary policy expectations had retracted further from the early and large interest rate cuts initially foreseen at the turn of the year. More favourable news on the global economy and less favourable news on inflation had both been key factors in shaping financial market developments. In the case of the first factor, macroeconomic data surprises had moved into positive territory in the euro area, the United States and China for the first time since May 2023. As a result, investors attached a discernibly lower probability to the scenario of a hard landing for the global economy. post:
ECB ACCOUNTS: MEMBERS EXPRESSED INCREASED CONFIDENCE THAT INFLATION WAS ON TRACK TO DECLINE SUSTAINABLY TO THE 2% INFLATION TARGET IN A TIMELY MANNER. post:
ECB ACCOUNTS: THE CASE FOR CONSIDERING RATE CUTS WAS STRENGTHENING. post:
ECB ACCOUNTS: IT IS IMPORTANT NOT TO BE COMPLACENT, AS THE DISINFLATIONARY PROCESS REMAINS FRAGILE. post:
ECB ACCOUNTS: PATIENCE AND CAUTION WERE STILL NEEDED.
- From ecb.europa.eu|Feb 22, 2024
Ms Schnabel noted that, since the Governing Council’s previous monetary policy meeting on 13-14 December 2023, the rapid easing of financial conditions observed after the 25-26 October meeting had levelled off and been pared back slightly. Financial conditions had eased sharply in November and December, as the narrative in financial markets had shifted from “high for longer” to swift disinflation and imminent monetary policy easing. After the Governing Council’s 13-14 December meeting, financial conditions had continued to ease until late December but had tightened slightly thereafter. This followed ECB communication that had countered the aggressive market pricing of a rate-cutting cycle starting as early as March 2024. post:
ECB ACCOUNTS: WE ARE CONFIDENT THAT MONETARY POLICY WAS WORKING. post:
ECB ACCOUNTS: ALL MEMBERS AGREED WITH THE PROPOSAL BY ECB’S LANE TO MAINTAIN THE THREE KEY ECB INTEREST RATES AT THEIR CURRENT LEVELS. post:
ECB ACCOUNTS: SCHNABEL SAW RAPID EASING OF FINANCE CONDITIONS PARED BACK. post:
ECB ACCOUNTS: THE RISK OF CUTTING THE POLICY RATES TOO EARLY WAS STILL SEEN AS OUTWEIGHING THAT OF CUTTING RATES TOO LATE.
- From ecb.europa.eu|Jan 18, 2024
Ms Schnabel noted that since the Governing Council’s previous monetary policy meeting on 25-26 October 2023 the narrative in financial markets had entirely turned around, proving once again its high sensitivity to incoming data and central bank communication. Markets had turned bullish, driven by expectations of quick and “immaculate” disinflation and an early and sharp monetary policy reversal. This repricing had supported risk asset prices, with equity markets soaring and sovereign and corporate credit spreads narrowing amid continued smooth market absorption. Buoyant risk asset markets and a stronger euro exchange rate were consistent with investors pricing in a bottoming-out rather than a deterioration in the euro area’s economic growth momentum. Looking at the key drivers of financial market developments and monetary policy expectations, the first and dominant factor had been the downward surprise in inflation worldwide. Second, other macroeconomic data, excluding inflation, had also come in better than expected in the euro area, alleviating fears of a “hard landing” of the economy. The third factor supporting investor risk appetite had been diminishing impact of geopolitical tensions, accompanied by lower oil prices. The pronounced post:
ECB ACCOUNTS: IT WAS STRESSED THAT THERE WAS NO ROOM FOR COMPLACENCY. post:
ECB ACCOUNT: A SIGNIFICANT PART OF THE RATE PASS-THROUGH IS PENDING. post:
ECB ACCOUNTS: MEMBERS EXPRESSED INCREASED CONFIDENCE THAT INFLATION WOULD BE BROUGHT BACK TOWARDS THE 2% TARGET IN 2025. post:
ECB ACCOUNT: SPECULATIVE FX POSITIONS POINT SOFT LANDING HOPE.
- From ecb.europa.eu|Nov 23, 2023
Ms Schnabel started her presentation by noting that the market’s immediate response to the dramatic geopolitical upheaval in the Middle East, following the terrorist attacks on Israel on 7 October 2023, had so far been contained. Bolstered by continued robust economic growth in the United States, the surge in global long-term bond yields that started over the summer had continued in recent weeks, as investors were increasingly internalising the prospect of interest rates staying high for longer. At the same time, expectations for the future path of short-term interest rates had remained broadly unchanged. Long-term sovereign bond yields had risen globally. Yields on both sides of the Atlantic were now approaching levels seen from 2005 to 2007 during the last monetary policy tightening cycle. The differential between US and euro area ten-year interest rates had fallen back to the levels observed when the ECB started increasing its key policy rates in July 2022. On aggregate, the recent rise in sovereign bond yields in the euro area had been predominantly driven by an increase in the risk- post: ECB Account Of The October Policy Meeting: Members Saw More Economic Uncertainty Than In September - Most Of Impact Of Past Hiking Had Yet To Materialize - Members Argued To Keep Door Open For Possible Future Hike - Further Hikes Not Part Of Current Baseline Scenario
- From ecb.europa.eu|Oct 12, 2023
Ms Schnabel noted that, since the Governing Council’s previous monetary policy meeting on 26-27 July 2023, investors’ growth outlook for the euro area and for the United States had continued to diverge, widening the gap in both nominal and real yields between the two economies and driving the euro lower against the dollar. Despite the expected deceleration in the euro area’s growth momentum, market expectations for inflation in the medium and longer term had edged up further. Torn between the perception of a weakening euro area ...
- From corporate.nordea.com|Sep 1, 2023
The July monetary policy account did not resolve the question of what the data-dependent ECB would do in the September meeting, but did reveal differences in views. We continue to think the central bank is done hiking, though it is a close call. The monetary policy account from the ECB’s July meeting did not offer much guidance on what the ECB would do at its September meeting. In fact, broad agreement prevailed that, ahead of its September meeting, the Governing Council should neither hint at further rate increases nor signal that ...
- From ecb.europa.eu|Aug 31, 2023
Ms Schnabel noted that, since the Governing Council’s previous monetary policy meeting on 14-15 June 2023, the narrative in global financial markets had shifted from a “higher-for-longer” scenario for inflation to growing optimism on a disinflation scenario. The increasing divergence of economic data between the euro area and the United States and the elevated sensitivity of euro area asset prices, especially to US data surprises, made the interpretation of market data challenging and could cause rapid shifts in market narratives. Following the previous monetary policy meeting, central bank communication, high UK inflation releases and strong US economic data had initially driven the euro short-term rate (€STR) forward curve higher. This up post: *ECB Account: All Members Supported 25bps Rate Increase *ECB Account: Preference Was Initially Expressed for Not Hiking *ECB Account: Cautioned Against Focusing Too Much on September post: ECB ACCOUNTS: MEMBERS CONCURRED WITH ECB’S LANE THAT THE NEAR-TERM ECONOMIC OUTLOOK FOR THE EURO AREA HAD DETERIORATED. post: ECB ACCOUNT: CONCERN WAS RAISED THAT THE ECONOMY IS FACING STAGFLATION.
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