ECB's Lane Reiterates May Hike Baseline, With 25bp Already 90% Priced

An interview with ECB chief economist Lane published at the top of the hour (on ECB website here) reiterates his baseline expectation for a May hike with a data-dependent caveat - the main takeaway quote on rate policy is below. He'd said similar in late March, noting that the central scenario was that banking sector tensions would ease and more hikes would be needed.

• Checking in on market pricing, Lane's comments did not move May pricing from 22bp (~just under 90% probability of a quarter-point hike), with terminal also unmoved - peak depo rate remains up 1.5bp on the day at 3.48% for September's meeting.
• That's just under 50bp of cumulative hiking (ie two 25bp increases).
• Lane: "If, by the time of the May meeting, [March's] projections remain on track, then a rate hike will be appropriate. However, we need to be scientific and data-dependent, so in these weeks we have to see whether the incoming data support that projection from March. If they create more inflation concerns, that will move us in one direction; if they create less inflation concerns, that will move us in another direction... if the baseline we developed before the banking stress holds up, it will be appropriate to have a further increase in May."