ECB’s Vujčić: I don’t think December decision will be that difficult

• We are on the same page and I don’t believe it will be much different in the coming meetings
• Expects ECB to stick with cutting rates at a gradual pace rather than a bigger move this month
• Inflation pick up in latest report mostly due to base effects i.e. energy prices phasing out
• New forecasts next week should reflect a substantial fall in inflation in the latter half of 2025
• The meeting-by-meeting approach remains the appropriate option for now
• Have to adjust monetary policy not only in response to US tariffs but also on EU response
• But most likely a trade war will lead to higher inflationary pressures
• Full transcript

He’s playing down any potential for a major debate on the December decision and endorsing a clear 25 bps move. That seems to be the angle that ECB policymakers have been taking as of late, so this just reaffirms that. The market pricing shows the odds of a 25 bps move at ~93% today.

This article was written by Justin Low at www.forexlive.com.