Something for your Espresso: We can cut rates with 3% inflation..
The ECB will join the Riksbank and the BoC in cutting rates with an inflation trajectory around 3-3.5% as the markets continue to chase more cuts towards the end of the year.
Despite a robust ISM Services report, the market is still anticipating rate cuts in the second half of the year. The strong ISM data suggests that recession concerns can be set aside for a few months, but we are rather discussing the path for rates towards the end of this year. In several cyclically sensitive economies, there are emerging signs of growth, indicating a positive trajectory towards the end of the year.
Chart 1: Cyclical surveys point to a re-acceleration towards year-end
The ECB will join the Riksbank and the BoC in cutting rates with an inflation trajectory around 3-3.5% as the markets continue to chase more cuts towards the end of the year.
0 Comments