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  • Emphasis was also paced on upward revisions to headline inflation projections
  • A pause would have given rise to speculation that tightening cycle was over
  • Not hiking could also send a signal of ECB being more concerned about the economy than inflation
  • Deposit facility rate around 3.75% to 4.00%, as long as it was understood as being maintained for a sufficiently long duration, should be consistent to return inflation to target
  • Decision between rate hike and pausing was a close call but tactical considerations played a role as well
  • Full accounts

If anything else, this just further solidifies the notion that the ECB are done. While the rate hike was meant to try and leave the door open to tighten further, the messaging after certainly did not convince anybody.

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