50bp Hikes Seen Unlikely After Lagarde's Guidance

Bloomberg has published a sources piece saying that ECB Pres Lagarde's blog post this morning implying 25bp hikes coming in July and September "has irked colleagues who want to keep open the option of moving faster" because that guidance "would effectively exclude a half-point move, a position that leaves some more hawkish officials uncomfortable".

• The piece's release met with little market reaction. That's probably because even if the Bloomberg piece is correct that there are some hawkish policymakers eager to keep the option open for a 50bp hike, Lagarde's blog was unusually clear on the path ahead and effectively a pre-commitment through September.
• Note that MNI's Policy piece last week quoted ECB sources playing down Dutch central bank head Knot's openness to a potential 50bp hike. The sources were sceptical that a move of that magnitude this year could gather support within the Governing Council.