ECB’s Villeroy: Inflation risk from trade tensions seems weak and could even be downward

• Inflation risk from trade tensions seems weak and could even be downward.
• Inflationary risk from a few weeks ago has gone.
• We are ready to act quickly depending on the data.
• We are in a “very choppy sea”.
• Agile pragmatism applies to the latest decision.
• Cannot say today what the ECB will decide in June.
• The ECB must be prepared for various possibilities.
• We do not see tensions on the markets, volatility has increased due to economic uncertainty.
• Fed’s Powell is doing his job very well because he is telling the truth as it is.

The market sees a 69% probability of a 25 bps cut in June and a total of 63 bps of easing by year-end.

This article was written by Giuseppe Dellamotta at www.forexlive.com.