ECB sources, via Reuters, say
- Policymakers still expect to cut rates in June but some think the case for pausing at their following meeting is becoming stronger given a continued rebound in US inflation.
- Doves are looking for cuts in June and July amid benign labour market conditions.
- While the July decision was not explicitly debated, some policymakers argued that a delayed start to the Fed's own cutting cycle warranted caution from the ECB.
- Policymakers note that every wage indicator is pointing in the right direction, growth is weak, and inflation has clearly ceded, warranting a cut in the record high 4% deposit rate.
- The path further ahead had become more uncertain for some after the stronger-than-expected US CPI, which had "shaken" some policymakers and played an important part in Thursday's discussion.
- Others insisted that the US was in a very different position to the euro zone both in terms of the economic cycle and of the fiscal stance.