- I see no looming spectre of a sustained inflation undershoot; risks are not tilted to downside
- It would take something like clear signs of unravelling in the labour market for me to act.
- US-EU trade deal reduces uncertainty, but unclear for now how it impacts inflation.
It looks like the easing cycle is done for Kazimir. Even though, he might still keep the door open for one last cut in December, it would take significant negative data to make him change his mind.
The market is pricing around 65% chance of a cut in December. Given that the uncertainty will likely fade after the deal and the ECB easing and fiscal expansion in the pipeline, the ECB might really be done with rate cuts for the time being.
This article was written by Giuseppe Dellamotta at investinglive.com.
