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Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 13-14 September 2023
12 October 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 26-27 July 2023, investors’ growth outlook for the euro area and for the United States had continued to diverge, widening the gap in both nominal and real yields between the two economies and driving the euro lower against the dollar. Despite the expected deceleration in the euro area’s growth momentum, market expectations for inflation in the medium and longer term had edged up further. Torn between the perception of a weakening euro area economy and stubborn inflation, expectations for the peak deposit facility rate and the shape of the forward rate curve had remained broadly unchanged.
Long-term…