The member of the Governing Council of the European Central Bank (ECB), Ignatius Viscostated on Friday that “a rate hike of more than 25 basis points could be appropriate in September if medium-term inflation expectations do not improve“.
Featured Statements
The pace of further gradual but durable tightening will depend on data and how they affect the outlook for inflation.
The markets were affected in June by the unjustified perception of a particularly aggressive monetary policy.
The 250 basis point high in the 10-year bond spread reached in early June is not consistent with Italy’s economic fundamentals.
There are no signs at present of a dangerous wage price spiral.
The anchoring of inflation expectations supports the view that the normalization of monetary policy may be gradual.
Market reaction
EUR/USD is extending its recovery from two-decade lows at 1.0071 hit early in the European morning, finding some demand from previous comments.
The pair trades at time of writing above 1.0109, down 0.51% on the day.
Source: Fx Street
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