Klaas Knot
The ECB is going to lean heavily on staff projections, despite their poor track record. If that's the case, why not let the staff make the decisions?
- Policy rates will slowly but gradually move to less-restrictive levels
- Based on March projections, optimal policy would have been broadly in line with 3-4 rate cuts this year
- Wage growth elevated and will be bumpy in 2024 so unclear what optimal policy path June projection will show
- Have to avoid any commitments on a specific future rate path
The next ECB decision is on Thursday as part of a busy week on the economic calendar.
