The verb that was removed from the statement was that ‘be brought’ was taken out of this:
“The Governing Council’s future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary.”
- This is the ninth decision to hike in 1 year
- Decision was unanimous
- Slight change of a verb was not random or irrelevant
- We are deliberately data dependent
- We may hike, we may hold
- We are not in the domain of forward guidance but we are very strongly rooted in our desire to break the back of inflation
- Notes that there will be two readings of inflation before Sept meeting
There’s still a hawkish bias here but if the European numbers continue to disappoint and inflation starts to fall quicker, it sounds like they could be done.
This article was written by Adam Button at www.forexlive.com. Source