ECB’s Knot: Policy is in a good place now

  • Inflation is still too high
  • But effects of inflation shock are waning
  • Economic cooldown desirable to tame inflation
  • Restrictive policy will be needed for some time
  • Stands ready to adjust rates further if disinflation process stalls

For one of the more hawkish members to tout more neutral policy, it says a lot about the current stance by the ECB. The question now is if the slowdown worsens at a much greater pace, how soon will it be before rate cuts come along? They aren’t saying it yet but that is the take by markets right now.

This article was written by Justin Low at Source