ECB's Lane: Disinflationary forces are there because of the Euro and energy ...Middle East

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ECBs Lane: Disinflationary forces are there because of the Euro and energy
Disinflationary forces are there because of the Euro and energy.Trade policy uncertainty has been on radar since summer.There's reason for longer-term optimism on the economy.The European economy is growing and showing resilience.The economy should be growing, despite trade negatives.We can't get ahead of ourselves on any path for economy.The US is an important trading partner, but not the only partner.We won't pre-commit to any rate path.Euro Area growth forecast will see a moderate markdown.

Nothing new here as the ECB continues to take a 'meeting by meeting approach' focusing on the incoming data. Lane highlights the disinflationary forces from a stronger Euro and falling energy prices. The economy is likely to face a growth slowdown in the short-term but if the US tariffs get rolled back, then they might fight with inflation again given their pre-emptive easing and a potential covid-style bullwhip scenario.

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

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