- A gradual withdrawal of stimulus is adequate in the current context
- Further rate increases could be made in the coming quarters
- That could reach levels in line with the natural rate of interest if the medium-term inflation outlook remains around our target
That's pretty much in line with the recent remarks surrounding a July rate hike. That is very much a given now but as much as the hawks are talking up a move to positive territory, I still hold my reservations. No doubt that the ECB could really go all out in the battle against inflation but the euro area economy is going to go through quite a testing period in the quarters ahead.
