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ECB Watch: More, more, more
The ECB continues to see more tightening warranted, and another hike in July appears a done deal. Upside inflation risks need to ease further and the impact of tighter policy to strengthen for the ECB to stop after July, which remains our baseline. The monetary policy account from the ECB June meeting confirmed that the ECB still feels more tightening is needed, and this is illustrated by each of the three parts of its reaction function. As a result, another 25bp rate hike in July is close to a done deal. For the ECB to stop after this, it needs to see more improvements in inflation dynamics, transmission of tighter ... (full story)