The job is not done yet on inflation, services prices still need to come downInflation is close to the 2% targetBarring new geopolitical or political risks, a large part of the final stage in bringing inflation back to 2% target will be completed next yearMonetary policy must respond to both downside and upside risks to inflationWe have been clear that we are moving on a meeting-by-meeting basisDon’t see spread fragmentation that would dissuade investors for the time beingFull transcript
The remarks are consistent with their recent communique. If anything, it reaffirms a rate cut for December. The question now after the softer PMI data last week though is will the ECB move by 50 bps instead? The inflation numbers later this week will provide the next clue for markets.
This article was written by Justin Low at www.forexlive.com.
