European Central Bank chief economist Philip Lane spoke in an interview with Italian daily Il Corriere della Sera, the interview was published on Saturday.
Lane discussed key wages data not becoming available until June (the ECB meet on the 6th that month)
- “By our June meeting, we will have those important data”
I don’t believe that Lane is seriously entertaining not cutting until June. And, indeed, in the interview he left the door wide open to much earlier cuts:
- “But let me emphasise, we do have other data that we will be looking at every week.”
- The ECB’s rate rise in September was in part “an insurance” against inflation coming back … and this will be considered when the time comes to ease policy
The (recent) background to his comments are that markets are pricing a March rate cut from the Bank. I think that ‘September was an insurance hike’ indicates Lane is considering a March cut is possible too.
Markets are pricing around 150bp of cuts in 2024. Lane didn’t enumerate the cuts but did say he sees a series of cuts to come (a “sequence of rate cuts”). He’s an economist thought so he did caveat this:
- “A false dawn, too rapid a recalibration, can be self-defeating”
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ECB dates for this year: