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- Momentum growing for a pause in ECB rate hikes as recession fears rise – Reuters
Momentum growing for a pause in ECB rate hikes as recession fears rise – Reuters
Reuters cited some sources with knowledge of the discussion on Friday, saying that momentum is growing for a pause in ECB rate hikes as recession fears rise but the debate is still open.
Additional takeaways
Advocates of ECB pause point to weak growth, benign wage growth, China's slowdown, improved policy transmission.
Policymakers agree any ECB decision to pause would need to make clear job is not done and that future hikes could still be needed.
Markets currently price about 50% chances of a hike in September and a pause but expect the ECB to make a final 25 basis point (bps) hike to 4.0% at some point later this year.
Market reaction
EUR/USD is testing intraday lows near 1.0770 on the dovish report, down 0.35% on the day.
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