- Underlying inflation has peaked since April and appears to have begun its decline
- But this encouraging sign is still far from sufficient
- Our options are open at the next and upcoming rate meetings
- We are very close to a peak in interest rates
- But far from a point where we could consider rate cuts
- Keeping rates high long enough matters more than the level
I'm sympathetic to his final point as the challenge for major central banks right now is to stick to the narrative of higher rates for longer. And especially more so for the ECB as the economy begins to take a nosedive now in Q3.