Minutes of the ECB’s September 10–11 meeting revealed broad agreement among policymakers that there was “no immediate pressure” to adjust interest rates. Officials noted that recent data confirmed inflation is “in a good place” while the domestic economy remains “resilient,” risks to growth now seen as “more balanced.”
The ECB recognized that the environment remains more uncertain than usual. The situation was likely to “change materially at some point” but the timing and direction were still unclear. The minutes noted the “high option value” of waiting for more evidence before altering policy, given two-sided inflation risks and the potential for unexpected shocks. The current rate level was described as “sufficiently robust” to manage a range of outcomes.
It also stressed that monetary policy should not be recalibrated for “moderate fluctuations of inflation around the target,” but only when a “significant deviation” is expected over the medium term. Though, while large, sustained deviations from target—like those seen over the past decade—are rare, monetary policy will still be ready to deliver “cyclical responses” to demand shocks.
