Automatic translation: Originally published in Finnish 29/09/2026, 04:44 GMT. Give feedback here.

The ECB's interest rate decisions are closely monitored, but speeches by central bankers between meetings can move the markets just as much. For longer-term interest rates, their overall impact is even greater.

For a reason, I am particularly interested in central bank communication, as I once wrote an empirical study on the subject, i.e., the predictability of central bankers' speeches. The topic has become increasingly popular among researchers, and in a recent blog post, ECB researchers discuss the impact of central bankers' speeches. The data is compelling: 304 Governing Council rate press releases and around 5,000 inter-meeting speeches and interviews from the years 1999–2024. It includes the ECB presidents and Executive Board members, as well as the heads of the largest central banks, namely those of Germany, France, Spain, and Italy.

The research results are somewhat surprising. Around 45% of interest rate decisions caused a significant market reaction, compared to a clearly smaller share of speeches. This is because central bankers also speak about topics such as financial stability and climate change, and these topics are not always of interest from the perspective of interest rate expectations, although otherwise they are.

However, there are manifold more speeches by central bankers than actual decisions, and some of them had an impact. More than 300 speeches or interviews moved the Euro Stoxx 50 index significantly, whereas the number of impactful rate press releases was 117. The combined impact of speeches on the index was 273 percentage points, compared to just 98 for the press releases.

For the 2-year OIS rate, the impacts were nearly identical: 718 basis points for press releases and 681 for speeches. For longer-term interest rates, the overall impact of speeches was even double. Therefore, if one wants to find reasons for the rise in long-term interest rates even now, one can observe, for example, this chart, which presents central bankers' speeches on a "hawk-dove scale", meaning the balance between those warning of inflation and advocating for rate hikes, and those emphasizing economic stability and advocating for a lower interest rate level. As can be seen from the chart, we are on the hawkish side: the Federal Reserve has risen to the top of the statistics among major central banks.

Source: Central Bank Watch

Speeches naturally move markets because they contain predictive power: they hint at future decisions. In November 2005, Jean-Claude Trichet anticipated the first rate hike in five years (which in hindsight was a mistake), and in June 2019 in Sintra, Mario Draghi laid the groundwork for the stimulus package seen in the autumn. Meanwhile, in November 2021, Christine Lagarde stated that rate hikes were unlikely, and interest rates fell. However, the hikes already began in July 2022.

Before the Governing Council's meeting, speeches move interest rates in the same direction as the upcoming decision. Interestingly, the effect is stronger before rate hikes than before cuts. According to researchers, central bankers emphasize their message more when they want to demonstrate that they are keeping inflation under control.

For investors, the message is clear: it is worth following the ECB also between rate meetings, and especially the President's words. In some cases, words speak louder than actions from an investor's perspective.