EZ Monetary Policy Statement

The European Central Bank on Thursday is set to slash rates again by 25 basis points just days ahead of the U.S. Federal Reserve beginning its own rate-cutting cycle. Traders are widely anticipating an interest rate cut at the Federal Reserve’s Sept. 17-18 meeting, as well as at the ECB’s meeting this week. “The rate cut this Thursday should be largely uncontroversial,” Holger Schmieding, the chief economist at Berenberg Bank, told CNBC in an email to clients. “Virtually all recent ECB speakers have confirmed that they would like to ...

Following July’s pause, the ECB is widely seen resuming its easing path this week. Falling inflation, a strengthening euro and an expected Federal Reserve rate cut next week provide all the scope needed while a still very sluggish economy offers plenty of justification. Although there may be some reluctance on the part of the hawks, most Governing Council (GC) members are likely to favour a second 25 basis point cut that would put the key deposit rate at 3.50 percent. However, the central bank is also likely to repeat the recent ...

Sure as the sun will rise, the ECB is set to cut rates on September 12 but will be noncommittal, or wishy-washy, about what happens next. At the last meeting, President Lagarde called September “wide open”, but a cut—just the second one this cycle—is likely a done deal, as inflation has come down to a 3- year low of 2.2% and core CPI is at a 4-month low of 2.8%. Broader economic growth is still soft (in fact, Q2 GDP was revised down) although cooler inflation is boosting real household incomes. And growth in the ECB’s negotiated ...

The European Central Bank’s carefully choreographed rate-cutting cycle got off to an awkward start in June after last-minute data upsets. For credibility’s sake, policymakers had only one choice – press ahead with the planned 25-basis-point rate reduction but present it as a ‘hawkish cut’. Fortunately for the doves and struggling European businesses, the case for further policy easing has strengthened since the last gathering in July when rates were kept on hold. Headline inflation dipped to 2.2% y/y in August and the rebound in euro ...

The press conference following the ECB’s announcement to keep its policy interest rates unchanged confirms that, at least for now, the ECB has given up on forward guidance. And rightly so… A meeting-by-meeting approach It comes as no surprise that the European Central Bank kept its policy interest rates unchanged. There simply hasn't been a lot of important data releases since the ECB’s June meeting. If anything, the latest data has pointed to weaker growth and lower headline inflation but still sluggish core and services inflation. ...

ECB President Christine Lagarde explains the Governing Council's monetary policy decisions and will answer questions from journalists at the Governing Council press conference to be held on 18 July 2024 at 14:45 CET in Frankfurt am Main.