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🚨 New ECB #exclusive interview out now
ECB Governing Council member Pierre Wunsch 🇧🇪 said tha the recent rise in long-term yields did not mean the ECB was "done" hiking.
Read the full interview here: econostream-media.com/news/2…
🫂 A measured farewell from Isabel Schnabel.
Her final speech as an ECB Executive Board member offered no clear hints on near-term policy, even as several colleagues are openly pointing to a December hike. With her departure approaching, she may be choosing her words more carefully to avoid moving markets.
📈 Schnabel's comments today were hawkish, but less so than some of her colleagues. Given her weight in our #ECBToneMeter, her remarks pulled down both the Executive Board and Governing Council indices.
Tomorrow (5 November) at 9:05 am, I will deliver my final speech as a member of the @ecb's Executive Board, giving my personal reflections on what the past seven years have taught me about monetary policy. The session will be livestreamed on our website.
‼️ ECB tone turned sharply more hawkish last week, and President Lagarde was the single biggest driver.
#ECBToneMeter:
🔹Governing Council: +0.85 → +1.68
🔹Executive Board: +0.66 → +1.75
Excluding her remarks:
• Governing Council would have been +1.50
• Executive Board only +0.60
What changed and who else pushed or pushed back 🧵
P.S. How high do you put the odds of a December hike after this week’s comments? 🧐
Others also opened the door to a December move:
🇭🇷 Žigman: decision on another increase could come as early as next meeting
🇱🇹 Šimkus: inflationary pressures point toward higher rates
🇮🇪 Makhlouf: seriously considered October hike; ready to act in December if warranted
🇦🇹 Kocher: policy response may be needed if inflation risks don’t ease
Counterbalancing voices emphasized tighter financial conditions:
🇮🇹 Panetta: further hikes could be necessary, but higher long-term yields are already tightening financing conditions
🇫🇮 Rehn: defended the October pause (stable underlying inflation, moderate wages, disinflationary effect of higher borrowing costs)
🇫🇷🇨🇾 Moulin & Patsalides: limited inflation spillovers
Full Tone Meter breakdown: econostream-media.com/news/2…
‼️ Sharp hawkish spike in our #ECBToneMeter following Lagarde's press conference.
Her repeated assertion that the direction of rates is "clear" barring "major developments" suggests another hike is now the baseline expectation.
Her more hawkish tone lifted both indices:
🔹 Governing Council: +0.81 → +1.27
🔹 Executive Board: +0.60 → +1.70
‼️ The ECB holds rates steady at 2.5%, as expected.
Let's check the language of its statement today vs September 10: What changed and what stayed the same on its monetary policy statement?
Find out in this #thread 🧵
ALT Maria Rita Quitadamo/ECB
👉 Implications of the war:
📌 October 29: "The increased magnitude and duration of the energy shock, as well as the implications for indirect and second-round effects, are likely to drive up inflation and lower growth."
📌 September 10: "In relation to the energy shock, the updated scenarios put together by staff illustrate the broad range of outcomes for how growth and inflation would evolve under different assumptions about its intensity and duration, as well as its indirect and second-round effects."
🔴 #BREAKINGNEWS | The ECB holds rates at 2.50%, as expected.
ALT Photo by ANGELA MORANT/ECB
‼️ ECB President Lagarde's announcement of her early departure caught economists surveyed by Econostream by surprise.
🔹 84% of respondents to the #EconostreamECBSurvey did not expect her to specify a departure date at today's press conference.
🔹 Only one respondent expected her to announce an early departure today.
ALT Christine Lagarde, president of the ECB, at the ECB Governing Council meeting in Frankfurt am Main on October 29, 2026. Photo by Maria Rita Quitadamo/ECB
ECB Press release says:
European Central Bank President Christine Lagarde today informed the Governing Council and the President of the European Council António Costa that she will step down from her position on 7 February 2027.
President Lagarde’s successor will be appointed by the European Council following the nomination process outlined in Article 283 of the Treaty on the Functioning of the European Union.
The Governing Council thanked President Lagarde warmly and gave her a long standing ovation.
A sneak peek at one of the key charts from the full report of our October 2026 Econostream ECB Survey (which will be available on our website shortly): 👇
The median forecast in Econostream's October survey sees the deposit rate reaching 2.75% in December and remaining there through the end of 2027, compared with market pricing of around 3.25%. By late 2027, market expectations exceed even the upper quartile of analysts' forecasts.
📊 Are markets getting ahead of themselves on ECB rate hikes?
Economists aren't buying market expectations for further tightening through 2027. 👀
Our latest Econostream ECB Survey shows analysts expect just one final hike to 2.75% in December and no more through 2027.
Who's got it right? 👇
econostream-media.com/news/2…
📊 Are markets getting ahead of themselves on ECB rate hikes?
Economists aren't buying market expectations for further tightening through 2027. 👀
Our latest Econostream ECB Survey shows analysts expect just one final hike to 2.75% in December and no more through 2027.
Who's got it right? 👇
econostream-media.com/news/2…
💡Our #ECBCommentRecap can be quite useful for spotting interesting patterns in ECB Governing Council members' comments over time.
After sharing some initial takeaways last week, we went back to it and found a few more interesting questions worth exploring:
🔹 Who has spoken most frequently ahead of the October meeting?
🔹 Do higher bond yields reduce the need for further ECB hikes? And why do officials disagree?
🔹 How much evidence of second-round inflation effects do policymakers need before acting?
A few things stood out. 🧵
🇪🇺 Further ECB rate hikes remain very much in play. But as next week's meeting approaches, some officials are increasingly emphasizing the risks of doing too much — and the tightening already being delivered by financial markets.
A closer look at their comments since September reveals some interesting patterns. Below are some of the key findings from our #ECBCommentRecap🧵
Another interesting contrast concerns how officials talk about second-round inflation effects.
While there is broad agreement that significant spillovers into wages and other prices have yet to materialize, some emphasize the case for caution, while others stress the risks of waiting too long.
🇬🇷 Stournaras, October 8: "We don’t have second-round effects, or at least important second-round effects in Europe. … So, we should take this into account and be moderate in our monetary policy tightening."
🇧🇪 Wunsch, October 16: "But we cannot wait to have visible and strong second-round effects before we act."
Full ECB Comment Recap 👇
econostream-media.com/news/2…
