As political events dominated the news agenda in the past week, the ECB forum in Sintra gave important hints towards near term monetary policy.
However, despite Lagarde’s cautious outlook, markets are still pricing in nearly two further cuts by end-2024, beginning in September.
US Fed Chair Powell also gave remarks at Sintra, widely received as more dovish in nature than recent comments.
Indeed, the Fed minutes from their June meeting highlighted a growing consensus that the disinflationary trend has now reemerged in the US, following a plateauing in inflation at the beginning of 2024.
