MNI BRIEF: ECB Tightening Conditions Peak Has Passed -Schnabel
ECB executive board member sees peak of tightening conditions "behind us".
The peak of tightening financial conditions coming from the European Central Bank's hiking cycle is "now behind us", executive board member Isabel Schnabel said in a speech in Milan on Friday.
Since the ECB paused in October, Eurozone financial conditions have come down "quite a bit" after markets started to anticipate cuts "quite aggressively", loosening financial conditions, Schnabel said in her speech. (see MNI SOURCES: ECB Cut Expectations Range From 50-100BP In 2024)
She noted services inflation remains sticky as 90% of the basket for services prices is still above 2% and seems that monetary policy tightening had more impact on goods than services. However, after some months when growth surprises were always tilted to the downside, the trend could have to start reversing and the economy might be "picking up," she noted.