ECB's Kassik: One more rate hike remains a reasonable expectation
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ECB's Kassik: One more rate hike remains a reasonable expectation Expects to have a clearer picture on wage developments by the autumn. Believes the conflict is unlikely to have a lasting impact on oil prices. Continues to see one additional ECB rate hike as a reasonable expectat
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The desk interprets the current commentary as underscoring a persistent hawkish bias from the ECB, despite softening economic conditions. According to the full note [source], oil prices stabilizing near pre-war levels may not lead to a dovish pivot from the ECB, with expectations for at least one more rate hike firmly in place. The commentary reveals that while oil's influence on rates has diminished, upside risks still loom, suggesting a careful approach to monetary policy remains necessary. This aligns with recent indications from ECB officials that a cautious stance is prudent, as they balance the need for stability against inflationary pressures, amidst mixed economic data from the Eurozone. The narrative suggests that while some officials may advocate for a pause, the broad expectation remains that risk management will lead to at least one further rate increase in the near future.
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