- A 50 bps rate cut this year would not be a good decision
- Our job is to deal with inflation
- We want to come close to the neutral rate but unsure of when we will reach it
- Wage pressures are moderating
The question posed to him was phrased as a 50 bps move in one meeting. But in total, the ECB is likely to deliver more than that in total for the remainder of the year. The next move in March is very much a given, so there’s the first 25 bps. But what comes after is less clear, though money markets are pricing the next 25 bps to be in June. As for the year itself, traders are still anticipating ~79 bps of rate cuts in total by the ECB.
This article was written by Justin Low at www.forexlive.com.
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