The Federal Reserve cutting rates sucks up all the oxygen in the central bank conversation but elsewhere there are brewing worries about inflation that Villeroy is hinting at here.
- Current ECB good position on policy does not mean it’s a comfortable one, nor a fixed one
The market is pricing in a 25% chance of a single rate cut next year but eyes are on economic data, particularly inflation. I highlighted yesterday how Spain’s economy was surprisingly strong this year, leading to a booming stock market.
More:
- Positive and negative deviations from 2% target, if lasting, are equally undesirable
- The name of the game for our future meetings is full optionality
- Downside risks to inflation remain at least as significant as upside risks
This article was written by Adam Button at investinglive.com.
