ECB’s Schnabel: I see only limited room for further rate cuts

• I see only limited room for further rate cuts.
• The impact of past ECB tightening is fading visibly.
• I need to see services inflation come down.
• I don’t see a significant risk of inflation undershoot.
• Inflation journey to 2% may still be bumpy in 2025.
• The ECB may noy be so far from neutral rates.ù

Schnabel is a known hawk but in her own words she changes her mind when the facts change. She is clearly pushing back against the aggressive rate cuts expectations. The market pared back some of those expectations and the 25 bps cut is now seen as the more likely at 71% probability.

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