• Prior decision
  • Main refinancing rate 4.25% vs 4.25% expected
  • Prior 4.50%
  • Deposit facility rate 3.75% vs 3.75% expected
  • Prior 4.00%
  • Marginal lending facility 4.50%
  • Prior 4.75%
  • Determined to ensure that inflation returns to its 2% medium-term target in a timely manner
  • Will keep policy rates sufficiently restrictive for as long as necessary
  • To continue to follow a data-dependent and meeting-by-meeting approach
  • Not pre-committing to a particular rate path
  • To reduce holdings of securities under PEPP by €7.5 billion per month on average in 2H 2024
  • ECB stands ready to adjust all of its instruments within its mandate to ensure that inflation returns to its 2% target over the medium term
  • Full statement

In terms of their latest forecasts, the ECB sees that:

  • Economic growth is to pick up to 0.9% in 2024, 1.4% in 2025, and 1.6% in 2026
  • Inflation is to average 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026
  • Core inflation is to average 2.8% in 2024, 2.2% in 2025, and 2.0% in 2026

Of note, both headline and core inflation have been revised up for 2024 and 2025. That should explain the slight bump higher in the euro as we work through the details in the statement.

Besides that, the decision is as you'd expect with the ECB continuing to reaffirm a more data dependent approach for now. At the same time, they're not going to commit to anything too early. So, I'd say one can still safely rule out a July move to follow this up.