ECB Likely to Remain Cautious Amid Rising Inflation
The European Central Bank will likely tread carefully after inflation rebounded in the eurozone, Omnis Investments' Patrick O'Donnell writes in a note to clients.
Inflation climbed back over the ECB's 2% target in November, hitting 2.3% on energy effects and still-high services inflation. While bank policymakers will be concerned at signs of a slowdown in the eurozone economy, it probably won't be pushed into cutting rates by half a point at next month's meeting, and will instead opt for a gentler quarter-point cut, O'Donnell says. "They may want to observe if there is any bounce back in the next round of survey data, and of course if there are any policy initiatives announced from the incoming U.S. administration which may impact their forecasts," he says.
Source : Dow Jones Newswires
