European Central Bank (ECB) Governing Council member and head of the Austrian central bank, Oesterreichische Nationalbank (OeNB) noted on Monday that warning signs that the ECB may undershoot inflation targets are growing, but overall inflation figures are still lopsided and make policy moves difficult.

Key highlights

Danger of undershooting 2% is not a reason to cut.

With core at 2.7%, ECB is already moving into neutral or slightly expansionary territory.

Below 2.5% there would be even fewer questions that we are no longer restrictive.

There is some possibility that we'll cut, and there is some possibility that we won't.

A decision in favour of another cut gets harder and harder, both now and beyond March.

I can't count too much on services inflation coming down.

 

Source: Fxstreet