Updated

Updated · investinglive.com · Aug 21

ECB's Kazāks Flags Pros and Cons of September Rate Hike as Markets Price 94% Odds

Updated

Updated · investinglive.com · Aug 21

ECB's Kazāks Flags Pros and Cons of September Rate Hike as Markets Price 94% Odds

1 articles · Updated · investinglive.com · Aug 21

September's ECB decision will hinge on incoming data, Mārtiņš Kazāks said, stressing policymakers see both benefits and risks in raising rates again.
Inflation expectations remain anchored near the ECB target and wage growth is gradually slowing, easing concern over a key domestic source of price pressure.
Kazāks said forward guidance has become counterproductive as geopolitical risks, energy markets and global growth can shift quickly, arguing for maximum policy flexibility.
Markets have already priced a 94% probability of a September hike, but Kazāks's more cautious tone suggests weaker appetite for further tightening than in prior months.

Sources

Will the ECB cautious shift prevent a September rate hike, or could unexpected energy shocks force their hand?

Could sticky service sector prices secretly undermine the central bank confidence in easing inflation pressures?

How will the transition to framework guidance impact market volatility leading up to the September decision?

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