- Disinflation is well on track.
- Rates are at the upper end of the neutral range.
- A trade war in the long term is a negative supply shock.
- The impact of a trade war on the long term is unlikely inflationary.
- Risk is that we move to a supply/demand situation like in 2022, which means we have to be vigilant on inflation.
- At meeting next week the ECB will not yet have new projections.
- Market functioning so far has been preserved.
- Reversal of bond markets needs to be monitored.
- Reality on markets can of course change quickly.
- As Europeans there is no choice but to come together and realise out own strength.
The market is certain of a 25 bps rate cut at the upcoming meeting and sees at least two more rate cuts by the end of the year.
ECB's Knot
