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How long is the ECB rate hike window?
Over recent weeks, Governing Council members have been falling over each other to signal that a July rate hike is likely. Although the most dovish members of the Council have been more cautious, it seems clear that there is a majority in favour of moving quickly as things stand. The key driver of this shift seems to have been the upward momentum in inflation expectations. We now expect a 25 bp rate hike in July, to be followed by another in September - previously we expected September and December moves. We have not pencilled in any rate hikes in the months beyond September. This is because we remain of the view that ... (full story)