The report says that even though other options remain on the table and that the debate is not yet settled, it seems like policymakers at the ECB are converging on a 25 bps rate hike next month. The sources said that past rate hikes have yet to work their way through the economy, so less is needed because the past moves are still yet to make an impact.
Adding that a terminal top is now in sight and that this supposed "last mile" is better and safer navigated via smaller increments. That said, the sources did mention that the debate is still open and that the outlook could change - especially with the next inflation reading for the euro area coming out just two days before the ECB's May meeting.
Some other details shared is saying that there is a small group arguing for a 50 bps rate hike with some also advocating for no change to interest rates in May - mostly the same southern European policymakers who did not support March's 50 bps rate hike.
