So far, European Central Bank (ECB) officials have successfully guided the Eurozone economy towards a 2% inflation target in unison. However, as they edge closer to the target,分歧 is expected to arise regarding when to take action.

Last week, when policymakers gathered in Washington to discuss the state of the global economy and potential challenges, friction points had already begun to emerge.

The views expressed by ECB members in speeches and conversations not only diverged on the future path of interest rates but also on how to communicate the ECB's intentions, the risks to the inflation outlook, and quantitative tightening policies.

This sets the stage for potentially contentious debates in the nearly seven weeks leading up to the Governing Council's December meeting. In the coming days, policymakers will receive October inflation data and preliminary insights into the third quarter's economic performance, which are likely to confirm that Germany has fallen into a recession.

Eurozone inflation rates may rise slightly this month.

While their reactions to these reports may provide more insights into how they currently assess the health of the Eurozone's 20 countries, the outcome of their next decision-making will not be determined for some time.

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Financial markets anticipate a roughly 35 basis point rate cut in December, which means traders are indecisive between a routine 25 basis point rate cut and a more aggressive 50 basis point rate cut.

ECB President Christine Lagarde was one of the first ECB officials to speak last week, preparing economists and investors for a plethora of comments from her peers as they attended the International Monetary Fund's annual conference in the U.S. capital. Out of the ECB's 26 officials, 19 have voiced their opinions.

Vice President Luis de Guindos and Executive Board member Isabel Schnabel will express their own views in the coming days.

"All week, people will say, 'Oh, it should be 50, it should be 25,'" Lagarde said in an interview. "No. The direction forward is clear, and the pace will be determined by the review and outlook factors, using three criteria and exercising judgment."Although most officials reiterated that these criteria—inflation prospects, the strength of underlying price pressures, and the transmission of policy—would form the basis of their decisions, some officials seemed to have strong preferences.

The President of the German Bundesbank, Joachim Nagel, warned against hastening to reduce borrowing costs. His Austrian colleague, Robert Holzmann, stated that a quarter-point rate cut in December was "possible," while the Governor of the Bank of Lithuania, Gediminas Simkus, believed that, based on the data, "I see no reason for a 50 basis point rate cut."

At the other end of the hawkish and dovish spectrum, the Governor of the Bank of Portugal, Mario Centeno, warned against confining the European Central Bank's policy choices to adjustments made in quarter-point increments.

He stated: "For an economy with an average inflation rate of only 0.9% over a decade, for an economy without investment, for an economy supported by a labor market showing some signs of weakness, we need to consider the possibility of taking more significant measures."

Policymakers are aware that accelerating the pace of easing comes at a cost, indicating that the European Central Bank's concerns about the economic outlook may be unwarranted.

The Chief Economist of the European Central Bank, Philip Lane, reassured the worried market that deflation in the 20 eurozone countries is on track, and the recovery has merely been delayed.

However, not everyone fully agrees with his assessment. Some believe that inflation significantly below the 2% target is already a real risk. Others express concern that, after Lagarde stated at the last press conference that the risks of price declines are greater than the threats of price increases, the European Central Bank's tone has become too dovish—and the agreed monetary policy statement still avoids giving a balance of risks.

The Governor of the National Bank of Belgium, Pierre Wunsch, said he "would not overemphasize" the recent drop in inflation to 1.7%—the lowest level in over three years.

The newly appointed Governor of the Bank of Spain, Jose Luis Escriva, stated: "The risks to economic growth are clearly downward. But whether the inflation path is biased downward is less apparent."

This divergence will not only affect policymakers' views on interest rate trends but also the wording they use to describe their intentions. Currently, the European Central Bank states that it will maintain a tightening stance for as long as necessary.The guidance has been discussed at the last meeting and could be subject to careful scrutiny as early as December. Some members believe that, in the face of persistent inflation risks, policy must continue to suppress demand, while others are ready to signal a willingness to support the economy, so the outcome largely depends on the new forecasts in December, which for the first time include an assessment for 2027.

At this month's meeting, a so-called mechanical update of the September forecast was conducted, indicating that the inflation rate will return to the sustainable 2% target by the second quarter of 2025 at the latest.

The market may interpret the abandonment of restrictive guidance as a signal for further rate cuts. Lagarde herself referred to this phrase as "magical language" and stated that even minor changes would be closely watched by observers.

The debate also revolves around the majority of officials' views on the neutral interest rate — an uncertain level of interest rates that neither suppresses nor stimulates growth.

While some policymakers are still reluctant to discuss this issue publicly, others have become more outspoken. Portugal's Centeno stated that he believes this rate is "at 2% or slightly below 2%," while Bank of Finland Governor Olli Rehn estimates that this rate will be between 2.2% and 2.8%.

Discussions on wording may also involve the "meeting by meeting" approach, with some policymakers fearing that it might wrongly imply that the ECB does not know where it is heading, while others remain satisfied with this term.

Quantitative tightening could also become a focus of debate in the Governing Council. The ECB has been shedding most of the bonds in its policy portfolio that are gradually maturing and plans to stop all reinvestments this year.

If these plans are adhered to, the central bank may soon find itself in a situation where it eases financing conditions through rate cuts while tightening them by drawing liquidity out of the market.

Those who support continuing quantitative tightening (QT) behind the scenes argue that reducing bond holdings has a minimal impact on the policy stance, and it is also done to create space for purchases in potential future crises. Meanwhile, those who scrutinize the bond market for stress points insist that interest rate decisions must compensate for any tightening that occurs, no matter how significant it is.

To some extent, it is easier to reach a consensus on how to communicate when the ECB has clear forward guidance or no guidance at all. The next phase will shift towards what Banque de France Governor François Villeroy de Galhau refers to as soft signals — leaving more room for pushes and pulls in opposite directions.During his speech in New York, he stated: "We have returned to a 'normal' inflation state, and our response mechanisms should be more 'forward-looking', with greater confidence in forecasts and less reliance on monthly preview data."