ECB meeting: Sticking to the “temporary” narrative

The ECB reconfirmed at the October meeting its policy stance and pushed back against current market expectations of a policy rate hike in late 2022. While the ECB expects inflation to increase further until the end of this year, it continues to foresee a “gradual” decline in the course of next year. Moreover, it continues to see inflation to remain below 2% over the medium-term. Thus, there was nothing in today’s press conference that would suggest any genuine change to the inflation outlook and thus an early tightening of monetary policy.