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Largarde Presser:
Determined action had to be taken
Today wasn’t an isolated decision
Risks to inflation tilted to the upside, risks to growth to the downside
Next hike not necessarily 75 bps, not the norm
We will determine on a meeting-by-meeting basis the level that will get inflation back to 2%
Initial signs of inflation expectations above target warrant monitoring
Wage growth still contained
Where we are at is not the neutral rate
Decision was unanimous, there were different views around the table
Downside scenario for growth includes negative growth in 2023, sees negative growth in 2023
We are ‘so far away’ from a policy setting that will be enough to bring down inflation
We don’t know what the terminal rate isStock markets Reverse Sharply after #ECB sources say ECB Officials Not Excluding 75bps Rate Hike in October if inflation persists
Do not exclude a 75 basis point hike in October if inflation outlook warrants an additional big step.
ECB Lane struck a more hawkish tone at the meeting today
QT is expected to be discussed at the October for the meeting and later datesS&P $ES_F $SPX reversed -50 green to red
NASDAQ $NQ_F $QQQ reversed -220 green to red
From Europe with love.SNB’s
SNB’s Jordan speaks after the ECB rate decision to hike rates by 75 basis points today:ECB 75 basis point rate hike not fully surprising
We must ensure price stability over medium-term
Gas or power stoppages would have devastating impact on economy’s
Exchange rates play a role in inflation, when big central banks act this helps us
You should not be surprised that SNB acts independently
It is positive for SNB of major central banks normalize
It would not create difficulty if the ECB takes 100 basis point hikes
S&P decides monetary policy and regular meetings unless under severe time pressure
no decision yet on what to decide at September 22 policy meeting
next step depends on analysis underway, need to gauge inflationary pressure, exchange rate
uncertainty about inflation much higher than usual, can’t say have reached a peak
price stability is our mandate of course need to keep impact of policy on economy in mind as well
Swiss franc rise tends to help rather than hurt
real effective exchange rate of franc has been astoundingly stableThe EURCHF has taken a move to the downside today and in the process has move back below the 2015 low near 0.97065.
ECB’s Lagarde says going forward appropriate pace of future rate increases will be decided on a meeting-by-meeting basis
Minutes:
Inflation was far too high and was expected to remain above the governing council’s target for an extended period of time.
A large number of members favoured raising the key ECB interest rates by 75 basis points.
Expectations for inflation remained stable, and wage growth remained moderate, with little evidence of second-round effects.
Over the entire projection horizon, the risks associated with the projected inflation path remained skewed to the upside.
The size of the upward revision in the staff inflation projection for 2024 was not deemed large enough to necessitate a more aggressive response.
The expected slowdown in economic activity would not be sufficient to significantly reduce inflation.
Without a timely reduction in monetary policy accommodation, inflationary pressures caused by euro depreciation may worsen.
ECB raised key rates by 75 bps in its October monetary policy decision following a 75-bps rate hike in September, and matching expectations from most
[See the full post at: ECB Raises Rates Another 75 bps as Expected TLTRO Terms and Conditions Recalibrated]
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