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What can we expect on the rate decision? A 75 bps rate hike is pretty much a done deal. I don't expect policymakers to move too aggressively with a bps rate hike as the debate over the past month or so has ever been between a 50 bps and 75 bps move. As such, the latter is very much priced in already so don't expect much upside reaction to the euro once the decision is announced.
What else is on the cards? I would expect Lagarde to continue to be rather vague about the so-called neutral rate. She should reiterate that they are headed towards that and that tighter policy is still very much needed in the wake of record inflation in the euro area. It will be interesting to see if she sticks with this line though: We will continue to hike rates in the next several meetings. Besides that, don't expect much on QT as all the focus and attention seems rather premature. Read our Terms , Cookies and Privacy Notice High risk warning: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
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