- Rate pause needs a clear signal that core inflation is slowing
- Stagflation is the base case
- More action is needed if core does not moderate
The market is pricing in a 92% chance of a hike at the July 27 meeting with another 25 bps priced in by year end.
In a separate report, the ECB’s Panetta is set to be named the head of the Bank of Italy, replacing Visco. Il Sole 24 says the announcement could come as soon as today.
This article was written by Adam Button at www.forexlive.com. Source