The ECB is moving from supply shock management to more active policy steering, incorporating a higher neutral rate of 2.5% into its outlook. Analysts expect minimal further repricing in the front end of the curve despite ongoing economic uncertainty.
Key Takeaways
- 1.The ECB is shifting away from strict supply shock management toward more active steering, balancing inflation risks with optionality.
- 2.A higher neutral rate (estimated at 2.5% by Philip Lane) is becoming a more prevalent theme than immediate aggressive hikes.
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Authors
Guillaume MartinJean-François PerrinAlex LiRiccardo LamiaMonna DimitrovaMatthias Loise
Securities
Schatz 2.50% 06/28Brent Crude
Themes
Central Bank CommunicationNeutral Interest Rate
Regions
EuropeUnited StatesFranceGermany