ECB-Meeting of 13-14 December 2023 Account of the monetary policy meeting of the Governing Council of the European Central Bank

January 18, 2024--Held in Frankfurt am Main on Wednesday and Thursday, 13-14 December 2023
1. Review of financial, economic and monetary developments and policy options Financial market developments
Ms Schnabel noted that since the Governing Council's previous monetary policy meeting on 25-26 October 2023 the narrative in financial markets had entirely turned around, proving once again its high sensitivity to incoming data and central bank communication.

Markets had turned bullish, driven by expectations of quick and "immaculate" disinflation and an early and sharp monetary policy reversal. This repricing had supported risk asset prices, with equity markets soaring and sovereign and corporate credit spreads narrowing amid continued smooth market absorption. Buoyant risk asset markets and a stronger euro exchange rate were consistent with investors pricing in a bottoming-out rather than a deterioration in the euro area's economic growth momentum.