• Cannot keep rates at current level for long, especially with support measures in place
  • Uncertainty has increased but has not changed ECB’s overall assessment
  • Only rumors that ECB will help Irish banks
  • ECB afraid haircuts for bond holders would cause market instability

Stark lays the groundwork for a series of hikes while downplaying talk of ECB support for Irish banks.

EUR/USD steady at 1.4085.