Revue de la BCE : La BCE a un niveau de confiance élevé pour réduire les taux d'intérêt maintenant, mais étonnamment aucun pour les prochaines étapes
Hugo Le Damany et François Cabau, économiste et économiste senior pour la zone euro chez AXA Investment Managers, commentent la dernière annonce de la BCE :
- Le Conseil des gouverneurs (CG) a annoncé une baisse de 25 points de base des trois taux principaux de la BCE, conformément à l'appel que nous avions lancé en septembre dernier.
- La BCE fait preuve d'une grande confiance dans cette décision, mais cela crée un vide lorsqu'il s'agit de passer aux prochaines étapes qui dépendent entièrement des données.
- Nous comprenons l'approche prudente, mais nous pensons qu'elle est exagérée.
- La dernière mise à jour des projections macroéconomiques ne met en évidence qu'un peu plus d'inflation et de croissance en 2024 et 2025 (+0,1-0,2 %).
- Nous sommes tentés de croire que les développements aux Etats-Unis ont largement influencé cette prudence.
- Notre appel à la BCE reste inchangé. Nous prévoyons toujours deux réductions supplémentaires de 25 points de base cette année (septembre, décembre) et en 2025 (mars, juin), chaque fois au cours de la réunion avec de nouvelles projections.
Comme prévu, le Conseil d'administration a réduit de 25 points de base les trois principaux taux d'intérêt de la BCE, conformément à l'appel que nous avions lancé en septembre dernier.
The GC argued it has made progress on inflation since September 2023 and inflation outlook and expectations have also improved, so "it is now appropriate to moderate the degree of monetary policy restriction". They also reiterated that financing conditions remain in restrictive territory, and this will continue to dampen demand, finally bringing inflation back down.
We believe the ECB took this decision because it considers this rate cut as relatively safe (no major risk of re-stimulating subsequent inflationary pressures).
But the ECB immediately reminded us that domestic price pressure remains strong. They have reiterated that policy rates will be kept restrictive for as long as necessary to achieve a return to its 2% medium term target in a timely manner. The GC insisted they will continue to follow a data dependant and meeting-by-meeting approach while they do not pre-commit to a particular rate path.
A very different tonality between June meeting and beyond
We are surprised by this duality as they didn't give more guidance for near term considerations, particularly as the current environment is not very different from March (where the June decision was probably taken). Headline and core inflation were already above ECB forecasts (January and February data averaged 2.7% YoY (headline) and 3.2% (core) against 2.6% and 3% for Q1 in ECB' March forecasts) while negotiated wages data was still at its peak.
From a purely data dependence approach, we think current economic surprises are equal. Thus, we struggle to understand the rationale to not provide any forward guidance for near term meetings. That probably confirms the decision has not been consensual but results from a compromise reached before. Otherwise, the GC (at least a majority) would have tempted to be more dovish.
We are maybe too impatient, and this could become more clear in the July statement as they did in April for the June meeting.
Domestic and external uncertainties
That means there is a large consensus within the GC believing the level of uncertainties is higher than some months ago.
At the domestic level, we agree uncertainties stay elevated (but not higher). Despite the lack of sufficient progress in the "official" wages data, productivity and profits that make tomorrow's price dynamics, inflation is currently around 2.5% YoY, which is not far from the target and is therefore compatible with some easing of monetary policy, at least in the near term. In other words, there is still some leeway to cut interest rate as real rates remain largely in restrictive territory.
Last but not least, neither Ms Lagarde or journalists discussed the Fed outlook, but the ECB is probably monitoring closely the FX movements and may want to wait a bit more as uncertainties on the other side of the Atlantic remain high.
In our view, this ultra-precautionary approach was not necessary at this stage but is more appropriate when real interest rates will be lower. But that doesn’t change the fact that if the ECB’s baseline happens, there will be very good reasons to cut in September and December again, in line with our long standing call.
Worth to remind that the ECB will stop reinvesting half of the redemptions in its Pandemic Emergency Purchase Programme asset program, worth approximately €7.5 billion per month over 2H24 (no reinvesting from January 2025).
Macroeconomic projection update: higher domestic inflation
Core inflation was upgraded to 2.8% in 2024 (+0.2pt versus March Macroeconomic projections), taking into account stronger inflationary pressure in services sector. They broadly kept the same disinflation pace beyond Q2 2024, raising only 2025 to 2.2% while 2026 average stays at 2%. On headline, it has also been upgraded. On top of higher core, it has been boosted by an upward shift of oil and gas futures prices (cut-off date around mid may). But this is already outdated as oil prices (spot and futures) abruptly fell since end of May. Interestingly, headline inflation is still below target in 2026.
The ECB is actively communicating on its three key criteria for inflation to land at target so we cannot finish this note without mentioning the latest update. Compensation per employee has been revised up to 4.8% in 2024 but slightly lower in 2025 to 3.5%. Productivity is unchanged in 2024 but lowered in 2025 as employment remains dynamic. Finally, the ECB published its unit profits forecast and it has been revised up to a large extent in 2024 to 0.1% (from -1%), consistent with our paper recently published on the topic.
Notes to editors
All data sourced by AXA IM as at 6 June 2024.
