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ECB Could Keep Rates Restrictive ‘For Quite a Long-Lasting Period’, Lane Says

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Executive Board member Philip Lane said on Tuesday that interest rates could remain in restrictive territory for a protracted period.

BIS Says Markets Underestimating Central Banks’ Resolve in Inflation Fight

By Xavier D’Arcy – FRANKFURT (Econostream) – The Bank of International Settlements warned on Monday that markets’ rate cut bets were premature, as central banks will need to keep rates higher for longer to tackle high inflation.

They Said It About the Policy Outlook - Recent Comments of ECB Governing Council Members

By David Barwick – FRANKFURT (Econostream) – The following is a compendium of comments made by European Central Bank Governing Council members related to the appropriate pace of upcoming ECB monetary policy tightening. We include only comments made in 2023.

Every Reason to Hike 50BP in March, After That We Will See, ECB’s Lagarde Says

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde said on Monday that there was every reason to believe that the ECB would hike by another 50bp in March.

ECB’s Vujčić: Rates Not Yet Restrictive, But About To Get There

By David Barwick – FRANKFURT (Econostream) – European Central Bank key interest rates are not yet in restrictive territory, but will soon be there, Governing Council member Boris Vujčić said Monday.

ECB’s Visco: We Will Be More Restrictive If Necessary

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Ignazio Visco said on Sunday that monetary policy in the Eurozone will be more restrictive if necessary.

ECB’s Lagarde Warns Against Complacency on ‘Unacceptably High’ Inflation

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde warned on Saturday against complacency in the wake of good news about the Eurozone economy.

Exclusive: ECB Insider: March Forecast Revision Unlikely To Be as Big as Market Thinks

- ECB insider: Updated forecasts will maintain view of more persistent inflation dynamics
- ECB insider: Don’t expect any material change in core inflation dynamics in 2023
- ECB insider: Not seeing much inflation from the end of China’s zero-Covid policy

Further Significant Hikes May Be Necessary To Contain Sticky Core Inflation, Nagel Says

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Friday that core inflation looked set to remain high for a prolonged period of time in the euro area, potentially necessitating further significant interest rate hikes.

Rapid Rate Hikes Leave ECB Facing Losses as Interest Costs Rose and Asset Values Fell in 2022

By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank announced on Thursday that it incurred losses of over €1.6 billion in 2022, a deficit it had to compensate for using funds from its provision for financial risks.

KfW Does Not Currently See Issuance Increase in 2023; Plans to Issue New 10Y EUR Soon, Perhaps in Q1

- KfW: Cost benefits of issuing US dollar bonds ‘not that obvious anymore’
- KfW: Optimistic that in Q2, ‘we'll find a good window’ to issue US dollar-denominated bonds
- KfW: Aim to reach average maturity of five to six years; don't plan many long-term fundings

ECB Not Obliged to Hike at Every Meeting Until September, Villeroy Says

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that the ECB was not necessarily going to raise rates at each one of its five monetary policy meetings between now and September, by which month he expects rate hikes to end.

ECB Insight: Monetary Policy Very Much on the Mind in Northern Finland

- ECB’s Kazāks: Council retreat occasion to align our views, express our worries and perspectives
- ECB’s Kazāks: ‘The meeting in Finland will prepare us for policy decisions going forward’

They Said It About the Policy Outlook - Recent Comments of ECB Governing Council Members

By David Barwick – FRANKFURT (Econostream) – The following is a compendium of comments made by European Central Bank Governing Council members related to the appropriate pace of upcoming ECB monetary policy tightening. We include only comments made since the December 15 Council meeting.

ECB’s Lagarde: We Will Not Be Weak on Inflation, Wage Negotiations Now a Key Variable

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde reiterated on Wednesday her determination to fight inflation and doubled down on the ECB’s data-dependent approach to monetary policy.

ECB’s Rehn Calls for Rate Hikes Beyond March, Sees Terminal Rate Reached in Summer

By David Barwick – FRANKFURT (Econostream) – The European Central Bank needs to hike interest rates beyond March in view of high core inflation, but should reach the terminal rate in the summer, ECB Governing Council member Olli Rehn said on Friday.

Bundesbank: Second-Round Effects From Wages To Keep Inflation Above 2% for Extended Period

By Xavier D’Arcy – FRANKFURT (Econostream) – Underlying inflation pressures are likely to remain persistent in the euro area, with wage increases leading to second-round effects on prices, the German Bundesbank said on Monday.

ECB Hawk-Dove Ranking: Vujčić Ranked as Mildly Hawkish

ECB’s Schnabel: 50BP Hike in March ‘Necessary Under Virtually All Plausible Scenarios’

By David Barwick – FRANKFURT (Econostream) – The European Central Bank will almost inevitably have to hike interest rates by 50bp next month, when it might provide some indication of its subsequent policy moves, according to ECB Executive Board member Isabel Schnabel on Friday.

ECB’s Villeroy: Interest Rates Should Peak by September; Need Core Inflation Turnaround To Stop Hiking

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Friday said that the ECB should hit the terminal rate by the end of September, and left open the size of any rate hikes beyond March’s likely 50bp increase.