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Third Day of ECB Symposium Update

Central Bank Policy Makers Meet in Sintra, Portugal for Third Day of ECB Symposium & Powell, Bailey, Ueda and Lagarde Share Centre Stage To Discuss Financial Conditions

Monetary Policy

Powell: “Although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough”.“Strong majority for two more rate hikes in dot plot”.
Comments follow FOMC’s pause on 14 June, leaving fed funds target rate at 5–5.25%.

Lagarde: “If the baseline stands, we know we will likely hike again in July”. Frankfurt not currently considering rate pause and rejecting market projections of H1 2024 cut.

Bailey: “[Markets] have a number of further increases priced in for us, and my response to that would be, well we will see”.
Comments come as money markets price in implied terminal rate of 6.09%.
Bailey on BoE’s 50bps Rate Hike on 22 June: “The cumulative data – both particularly on the labour market and on the inflation release we had, which to us showed clear signs of persistence – caused us to conclude that we had to make really quite a
strong move”.

Ueda: Ready to adjust policy, potentially as soon as this year.


Lagarde: “We are not seeing enough tangible evidence of falling underlying inflation”.
Comments come as Eurozone core inflation is just 40bps down from all-time peak.

Powell: “Inflation proved to be more persistent than expected”.

Bailey: “It’s core that’s the issue, it’s much stickier”.
Comments come as core inflation in the UK is now at its highest level since 1992.

Ueda: “We are seeing signs of inflation expectations rising but they are not fully in line with the inflation target”.


Bailey: “UK economy turned out to be much more resilient”.

Powell: “The economy is resilient and still growing, albeit at a modest pace”.

Lagarde: “Manufacturing does not give great hope for a strong recovery”.


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