- Members expressed increased confidence that inflation would return to target over the medium term.
- Members attached a higher probability to the possibility that the trade shock would be inflationary beyond the short term.
- Increased confidence that inflation would return to target in line with the March baseline projections.
- This pointed to upside risks to inflation in the medium to long term.
- Uncertainty, the appreciation of the Euro and the decline in oil and gas prices, would further dampen the inflation outlook in the near term.
- A cut at the present meeting could be seen as frontloading.
- A few members noted that they could have felt comfortable with a 50 basis point rate cut.
- Market-based indicators pointed to a tightening of financial conditions.
- Wanted to avoid the perception that the neutral level of interest rates was the end point of the current cycle.
- Disinflation to dominate in short term due to Euro.
- Euro Area had built up some resistance to shocks.
- Euro seem to turn into safe-haven currency.
- Inflation was expected to hover close to the inflation target of 2% for the remainder of the year.
This is the equivalent of the FOMC Meeting Minutes. It’s not a market moving release and the data is stale by the time it gets released.
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This article was written by Giuseppe Dellamotta at www.forexlive.com.
