- Expects 25 bps hike in July but open to discussing 50 bps move, possibly in Sept given record inflation
- Lifting rates to neutral may not be enough to contain inflation
- Inflation is broadening but not yet de-anchoring
- Short recession in some eurozone countries possible this year but recession for entire bloc unlikely
- Neutral rate is closer to 2% than 1%
- It will take around 200 bps of hiking to get to neutral
The hawkish rhetoric is ramping up after eurozone inflation today came in at 8.1% y/y compared to 7.7% expected.