- Optionality remains essential.
- Inflation undershoot would only be temporary.
A bigger rate cut would certainly see European long term yields surging as it would be seen as a mistake in the current context. He’s taking a more neutral view on rates here and he’s not worried of undershooting the inflation target. He’s likely for a cut in June and then pause for longer.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
