By Marta Vilar – MADRID (Econostream) – Faster disinflation and weaker economic growth are not the only arguments wielded by European Central Bank Governing Council members in support of a rate cut this week. Cracks in the area’s labour market are also increasingly cited by authorities wanting to ease monetary policy further.
14 October 2024
By David Barwick and Marta Vilar – FRANKFURT (Econostream) – Right off the bat, we would like to note that we stick to the view that the European Central Bank’s Governing Council is more likely than not to cut interest rates by 25bp at its monetary policy meeting next week. Too many Council members have indicated too clearly that they favour this outcome, while too few have expressed opposition or even just uncertainty.
11 October 2024
By David Barwick – FRANKFURT (Econostream) – On a day like today, that so very German word Torschlusspanik might come to mind. Literally ‘gate-closing panic’, it refers to the fear of letting an important opportunity slip by at the last minute and is often used in the context of those worried that their marriageability is on the verge of expiration.
9 October 2024
By Marta Vilar – MADRID (Econostream) – As support mounts for an interest rate cut at the European Central Bank’s Governing Council meeting next week, policymakers appear oddly unfazed by the dramatic impact on oil prices of rising tensions in the Middle East.
8 October 2024
By David Barwick – FRANKFURT (Econostream) – Hours after our prediction one week ago that the European Central Bank’s Governing Council would cut interest rates in October, ECB President Christine Lagarde dropped what we and others considered a corroboratory hint. For those not fond of her strategic ambiguity, Council member François Villeroy de Galhau has now provided greater clarity.
7 October 2024
By David Barwick – FRANKFURT (Econostream) – Last Thursday we outlined a path for the European Central Bank’s Governing Council to cut interest rates in October rather than wait until December. Still, an October cut was, we wrote, ‘no given yet, though the odds have clearly risen.’
30 September 2024
By David Barwick – FRANKFURT (Econostream) – We have tended to believe, with a certain conviction, that the European Central Bank’s Governing Council would stick for the time being to a quarterly pace of easing, so that the next rate cut would be in December rather than October.
26 September 2024
By David Barwick – FRANKFURT (Econostream) – Observers of the European Central Bank who reacted with enthusiasm at the appearance of an interview with a member of its Executive Board – on this occasion Vice President Luis de Guindos, who spoke with Portuguese weekly Expresso – may have felt a tinge of disappointment to find no reference to the most interesting recent development of relevance, namely the US Federal Reserve’s decision two days ago to launch its easing cycle with a surprisingly large 50bp cut.
20 September 2024
By Marta Vilar – MADRID (Econostream) – Euro area wage growth may appear to be receding, based on a couple of important indicators that seem to point to a slowdown, but it would be premature for monetary policymakers to feel relief.
18 September 2024
By David Barwick – FRANKFURT (Econostream) – Ten or so members of the European Central Bank’s Governing Council have already piped up since ECB President Christine Lagarde’s press conference on Thursday; their comments do not, to our mind, change the outlook or contradict Lagarde.
16 September 2024
By David Barwick – FRANKFURT (Econostream) – ECB press conferences don’t get much more flawless than the one following Thursday’s meeting of the Governing Council, with President Christine Lagarde giving nothing less than a masterclass in how to beat back attempts to thwart the ECB’s patient approach to monetary policy.
13 September 2024
By David Barwick – FRANKFURT (Econostream) – Could the European Central Bank Governing Council actually be unanimous in its decision Thursday to cut interest rates by another 25bp?
10 September 2024
By Marta Vilar – MADRID (Econostream) – The European Central Bank will share its updated projections following the Governing Council meeting on 12 September, and although most policymakers haven’t yet seen these, their public comments may give some idea of what to expect.
5 September 2024
By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Wednesday warned that France might not be able to reduce its deficit to below 3% before 2027.
4 September 2024
By Marta Vilar – MADRID (Econostream) – Time is running out at the Bank of Spain, with days left before the institution could potentially be leaderless at the 12 September meeting of the European Central Bank’s Governing Council, at which monetary authorities are widely expected to cut interest rates by 25bp.
3 September 2024
By David Barwick – TALLINN (Econostream) – If the hawks at the European Central Bank ever seriously entertained hopes of staving off a rate cut on 12 September, those hopes will have dwindled significantly with the release Friday of euro area inflation data confirming the continuation of the disinflation process.
30 August 2024
By David Barwick – FRANKFURT (Econostream) – It can be tempting to dismiss the utterances of those European Central Bank Governing Council members who habitually tend to the extremes of hawkishness or dovishness. An exception is worth making for the latest contribution of Bank of Greece Governor Yannis Stournaras to the discussion.
2 August 2024
By David Barwick – FRANKFURT (Econostream) – Some observers of the European Central Bank have reacted to the July euro area inflation data released Wednesday by reflexively inferring that they materially reduce the chances of a September rate cut. We feel a shrug would be the more appropriate reaction.
31 July 2024
By David Barwick – FRANKFURT (Econostream) – Hawkish though she may seem at first glance, European Central Bank Executive Board member Isabel Schnabel’s interview from Friday changes little to nothing in our view, and it is possible it was never meant to do much more.
29 July 2024
By David Barwick – FRANKFURT (Econostream) – With one sentence, European Central Bank Vice President Luis de Guindos on Tuesday seems to have established what information September has to bring for the Governing Council to cut interest rates again. Less explicitly, but to our mind nonetheless unambiguously, he conveyed the expectation that the conditions for more easing would be met eight weeks from now.
23 July 2024