Euro area inflation peaked after US inflation, and has come down further and faster. But like the US, it seems stuck above target so far this year. Nevertheless, the ECB statement language doesn't seem worried about it one little bit. Still signaling rate cuts are coming (not saying when, though).
ECB and Euro Area Economy Monitor
ECB and Euro Area Economy Monitor
Thursday, March 7, 2024
The good news is that the ECB is lowering all its inflation forecasts. The bad news is they still believe price pressures persist thanks to "strong growth in wages." They now say "financing conditions are restrictive." Time to increase expectations for rate cuts.
ECB and Euro Area Economy Monitor
Thursday, January 25, 2024
The ECB admits there is a "declining trend in inflation" and that it "continued." Another pause in rate hikes -- which at this point means that the hiking cycle is definitely over. As with the Fed, it's just a question of when the first cut comes. Soon, we think.
ECB and Euro Area Economy Monitor
Thursday, December 14, 2023
A much less dovish ECB. Among world central bankers, Powell seems to be emerging as a thought-leader in quickly reversing the hiking cycle, while LaGarde and Bailey cling to an overweening caution.
ECB and Euro Area Economy Monitor
Thursday, October 26, 2023
The ECB skips. No hikes. Done. The policy statement brags that incoming information confirms their hawkish view on inflation. But then, "At the same time, inflation dropped markedly in September." Oh well. Consistency is the hobgoblin of consistent minds. And this is Europe, after all.
ECB and Euro Area Economy Monitor
Thursday, September 14, 2023
Another ECB rate hike. But the statement language subtly makes it seem this will be the last one, with a downward revision to the longer term inflation path.
ECB and Euro Area Economy Monitor
Thursday, July 27, 2023
The ECB follows the Fed with a 25 bp hike, a concession that inflation is improving, more undefined worries about persistent "underlying inflation.," and celebration of tightening credit conditions as "dampening demand."
ECB and Euro Area Economy Monitor
Thursday, June 15, 2023
The ECB admits that "inflation has been coming down" and "price pressures...show tentative signs of softening." But still another 25 bp rate hike. At the prior meeting they acknowledged the risks arising from lags in transmission of policy -- this time they didn't bother. Eyes firmly on the rear-view mirror, they took that language out entirely.
ECB and Euro Area Economy Monitor
Thursday, March 16, 2023
The fools at the ECB went ahead with a 50bp rate hike -- denying next week's FOMC the precedent to pause. And no new LTRO. Gone are the days of Mario Draghi and "whatever it takes." Now, apparently, it's "Hey... whatever... "
ECB and Euro Area Economy Monitor
Thursday, February 2, 2023
The ECB hasn't gotten the memo, apparently. Another 50 bp hike, part of "raising interest rates significantly at a steady pace...to ensure a timely return of inflation to its 2% medium-term target." Take a look at the inflation measures in the report today: energy inflation, the real culprit throughout Europe, is below pre-Ukraine levels. Stop already!