ECB President Lagarde (Q&A), asked about the potential for a June rate hike, says she will not confirm whether we are close to Baseline Scenario 1 or 2; but we are certainly are moving away from the baseline
- ECB today made an informed decision with insufficient information
- Had a debate at length
- Hard data is in line with projections, but there is uncertainty; will need to revisit the issues at the next meeting
- Six weeks until next meeting should be sufficient time for the ECB to assess
Context
Lagarde's remarks indicate that while the ECB is deliberating on the rate path, the uncertainty surrounding economic conditions is significant. Her suggestion that they are moving away from the baseline implies a potential pivot in strategy, which could weigh on market expectations for a June rate hike. Traders should monitor upcoming data closely, as this will influence the ECB's assessment ahead of the next meeting.
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