ECB's Lane says he is comfortable that hiking rates makes sense under milder scenario
- Open minded to looking through shocks if they are not long lived.
- Even if oil is falling, think food will keep going up.
- Hike aims to contain spread of energy shock.
- Current situation is a medium shock.
- Tightened last week from a position of firming neutral.
- Think upper end of neutral has crept up to 2.5% from 2.25%.
- Does not want to yank rates around.
- Employment stable and real incomes keep going up.
- Euro appreciation still putting a downward pressure on prices.
- Sees a prolonged period of high inflation.
- It is viable for the Federal Reserve and the European Central Bank to pursue divergent interest rate paths.
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