The European Central Bank (ECB) decided to keep its three key interest rates unchanged after 10 consecutive hikes. The accompanying press release was pretty much identical to the one in Sep, with the Governing Council saying it will continue to follow a data-dependent approach. 

The Governing Council also reiterated its commitment to continue reinvesting the proceeds of maturing bonds purchased through the Pandemic Emergency Purchase Programme (PEPP). At the press conference, ECB President Christine Lagarde said that PEPP parameters and minimum reserve requirements were not discussed and did not elaborate on when these may be addressed. 

On the latter, the ECB may be waiting for the discussion on its framework review to pick up, which will likely occur in late-2023 or early-2024. Meanwhile, given higher bond yields, it is likely the ECB will continue to adhere to that through the end of 2024. As for interest rates, we expect the ECB to keep rates higher for longer, though the door to future rate hikes remains open.