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MNI ECB Preview - October 2022: 75bp Now, 75bp In December

EXECUTIVE SUMMARY

  • We expect the ECB deliver another 75bp hike at this week’s meeting.
  • While President Lagarde may indicate that discussions on QT are advancing and that this would naturally follow the normalisation in policy rates, it seems premature at this stage for the ECB to unveil an explicit roadmap for shrinking the balance sheet.
  • With no let-up in inflation surprises, policy rates still a long way off neutral (and further away from being restrictive), and the relatively low bar to ‘jumbo’ policy rate hikes following the September move, we expect the ECB to go again in December with a 75bp hike.
For the full publication please see:

ECB Preview Oct 2022.pdf

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