ING: ECB September rate hike had broad support, but another hike in October unlikely
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According to a report by ING economist Carsten Brzeski, the European Central Bank's September monetary policy meeting minutes show broad support for the rate hike decision. However, Brzeski notes that internal discussions were more balanced than ECB President Christine Lagarde's post-meeting comments suggested, making another rate increase in October unlikely. Some officials argued that the energy shock may be shorter-lived than previously assumed, while others questioned the narrative of the European economy's resilience to the energy shock. Additionally, rising bond yields have reinforced the view among some officials that further rate hikes are unnecessary. Brzeski added that as bond markets are doing the ECB's work of tightening financial conditions, some officials' willingness to continue hiking may have diminished since the September meeting.
Source report
October 8 – In a recent report, ING economist Carsten Brzeski noted that the European Central Bank's (ECB) September monetary policy meeting minutes showed broad support for the month's interest rate hike. However, Brzeski pointed out that the internal discussions were actually more balanced than what ECB President Christine Lagarde suggested in her post-meeting remarks, indicating that another rate increase in October is unlikely.
Key points from the analysis include:
- Divergent views among officials: Some policymakers believe the energy shock may be shorter-lived than previously assumed, while others questioned the narrative that the European economy has demonstrated resilience against the energy shock.
- Rising bond yields: The continued increase in bond yields has reinforced the view among some officials that further rate hikes are unnecessary.
- Shifting sentiment: Brzeski added, "With the bond market doing the ECB's work of tightening financial conditions, some officials may now be less inclined to raise rates further than they were at the September meeting."
Source
domesticWestern