ECB's Makhlouf: October Meeting Remains Open, No Options Ruled Out
nashnova research
ECB Governing Council member Gabriel Makhlouf said every meeting is a 'live meeting', keeping an October rate hike on the table; inflation risks remain tilted to the upside, but he refused to say whether rates have entered restrictive territory.
Will the ECB actually hike again in October?
Makhlouf was explicit: in times of uncertainty, every ECB meeting is a "live meeting" — nothing can be ruled out and nothing can be locked in.
This means → the October 29 session is not a formality; a hike remains a real option.
Context: the Fed raised rates by 25 basis points on Wednesday, and the ECB itself hiked just last week. Some policymakers already see October as a possible action window, but economists broadly expect the December quarterly-projection meeting as the likelier trigger point.
Why is inflation still climbing?
Makhlouf noted that oil and natural gas prices keep rising. Eurozone inflation is likely to move above the current 3.3%, pulling further from the ECB's 2% target.
The energy shock triggered by the Iran conflict has not faded. His assessment: "inflation risks remain tilted to the upside."
He added, however, that he has not yet seen worrying signs of second-round wage effects. In plain terms = prices are rising, but wages have not started spiralling up alongside them — the worst-case loop has not kicked in.
Is the current rate level actually high?
The ECB's latest hike brought the deposit rate to 2.5%. Asked whether rates have entered restrictive territory — a level high enough to actively slow the economy — Makhlouf declined to comment.
He said only that "the current level is still within the neutral range," stressing that judgment must be grounded in real conditions, not purely in neutral-rate theory — a theoretical rate that neither stimulates nor restrains growth.
This means → in his view, 2.5% does not yet qualify as "tight", and the ceiling for further hikes is not sealed.
Are the market's three-hike bets realistic?
Markets currently price in at least three 25-basis-point hikes over the next twelve months. Makhlouf refused to weigh in, saying "I don't judge whether the market is right or wrong."
But he stressed the ECB is committed to hitting 2% inflation, and "the data have not yet reached where we need them to be."
This reflects a clear signal: the ECB is not satisfied with the pace of inflation's retreat — the hiking cycle is most likely not over.
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