This is of course the key event of this week. The European Central Bank is meeting its Governing Council on Thursday to make its monetary policy decision. It will be at the new times, established since July: 2:15 p.m. for the press release from the Frankfurt institution and 2:45 p.m. for the start of the press conference by its president Christine Lagarde.
With inflation prancing to 9.1% year on year in August, up another 0.3 point from July, there is no doubt that the central bank will once again be firm. In Jackson Hole, Isabel Schnabel, member of the Executive Board of the ECB and who represented Christine Lagarde for the occasion, also declared herself in this direction. ” In this environment [de fort ancrage de l’inflation à des niveaux élevés]central banks must act forcefully “, she said.
75 basis points on the table
Since these latest consumer price figures, the consensus is for an increase of 75 basis points in the ECB’s refi, which would thus be increased to 1.25%, against 0.5% in July, itself raised by 50 basis points. ” The future path of the Governing Council’s key interest rates will depend on the data and will help ensure that its medium-term inflation target of 2% is achieved. “, had clearly stated the institution in its press release of July.
” In the leading economy of the Economic and Monetary Union, the end of transitional tariff reductions threatens, in the midst of the energy crisis, to drive up [l’inflation] more from septemberanalysis Véronique Riches-Flores, economist and founder of RF Research, while on October 1, the second leg of the 14.8% minimum wage increase promised by the Scholz coalition will take place. In the rest of the euro zone, ten countries recorded a price increase of more than 10% per year (…) The real surprise would be if the ECB did not raise its rates by ¾ points on Thursday. »
“It involves sacrifice”
” Fighting inflation will be ‘painful’, says Powellrecalls for its part the firm Oddo BHF; it involves ‘sacrifices’, adds Schnabel. It is better to make these sacrifices without delay lest they will be even greater if delayed. The ECB seems determined to increase the pace and speed of the tightening in this cycle. It will be the most aggressive in the history of the ECB. There remains a fraction of the Board of Governors which still defends gradualism, for example the chief economist Philip Lane, but it is in the minority. »
Across the Atlantic, Jerome Powell is due to participate this Thursday in a debate on monetary policy at the invitation of the Cato Institute, a Washington-based think tank, less than two weeks before the Fed’s next decision on its interest rates and after its recent intervention in Jackson Hole, which threw a chill on the markets.
The other appointments of the day will seem very dull compared to that of the European Central Bank. In the United States, we expect at 2:30 p.m. weekly jobless claims then the oil stocks at 4:30 p.m.
On the business side, Ruby, Savencia, SES-Imagotag, spineway and Vranken-Pommery Monopoly publish their half-year results.