ECB's Knot: Disinflation is well on track ...Middle East

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ECBs Knot: Disinflation is well on track
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.

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.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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