IMF Kammer is now speaking on Europe and says:
- "Tit for tat" on trade and subsidies will be very distracting for European economy, structural reforms needed
- we are expecting gradual reduction in policy rates.
- ECB needs to be ready to be tighter, or looser, on monetary policy based on uncertainties.
- If tightening path for US diverges from baseline, there is upside risk for European inflation
More comments:
- US inflation driven by demand, EU inflation driven by energy price shocks.
- EUs disinflation driven by fall in energy prices, supply chain disruptions easing and affects of monetary policy
