ECB’s Schnabel: We are getting closer to a point where we pause or halt cuts

• We are getting closer to a point where we pause or halt cuts.
• I think R* cannot be any reliable guide for monetary policy in real time.
• Restriction has come down significantly, up to a point where we can no longer say with confidence that our policy is still restrictive.
• Savings rate has started to come down.
• Domestic inflation is still high.
• Wage growth is still elevated.
• We’ve seen new shocks to energy prices.
• I would exclude a rate increase.
• Services inflation should start to come down in February.
• Many indications are that wage growth will decelerate.
• Risks to inflation outlook somewhat skewed to the upside.

This article was written by Giuseppe Dellamotta at www.forexlive.com.