- Uncertainty is high but the path is leaning towards lower inflation
- We can remove some restriction but still need to retain some degree of restrictiveness
In other words, he is backing more rate cuts if the data trajectory holds in the months to come. As for market pricing, traders are seeing ~41 bps of rate cuts still to come for the ECB. The next full rate cut is priced in for October but the odds of a September move are at ~71% currently.
This article was written by Justin Low at www.forexlive.com. Source