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ECB’s Knot: Markets may be underestimating September rate hike chances

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  • Bringing inflation to 2% by the end of 2025 is the bare minimum
  • Rate hike is a possibility, not a certainty

He touts the headline but then goes on to say that is is just merely a ‘possibility’. That’s no firm conviction that policymakers are leaning towards a rate hike and so far, their posturing and language isn’t really all too keen either. Currently, markets are just pricing in ~32% odds of a 25 bps rate hike for next week.

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