ECB’s Vujčić: We won’t know in Sept, October or even November where the terminal rate is

  • Economic activity is slowing faster than we forecast
  • Softening of economy may help bring down inflation faster
  • But labour market resilience still an upside risk to inflation

At this point, it sure looks like they are leaning towards a pause but want to keep the door open to perhaps tighten policy again later on if need be. But the thing is, the economic deterioration in the euro area is going to make the case for rate hikes down the road extremely difficult. A rock and a hard place.

This article was written by Justin Low at Source