ECB President Lagarde (Q&A) says the mild scenario in the June projections is now unlikely

The ECB's practice of publishing mild and severe alternatives around its projections, rather than a single path, has meant that officials signalling which scenario now looks operative functions as a soft revision to the outlook between forecast rounds. The distinction worth drawing is whether the mild scenario failure is being driven by the external side, energy and trade assumptions, or by domestic demand, since the former has tended to push the Governing Council toward caution on growth while holding the inflation path, and the latter toward a more directly dovish reaction function. Remarks delivered in Q&A rather than prepared text carry somewhat less weight as a coordinated signal, and past episodes have shown follow-through depends on whether the chief economist and other hawks echo the framing. The transmission channel is the near-term rate path pricing at the front of the EUR curve and the spread complex, with the next projection round becoming the focal point for formal confirmation. Worth watching is whether the staff forecast or the account language migrates toward the same admission.