- It was argued that it was no longer possible to be confident that monetary policy was restrictive
- It was suggested that the balance was increasingly shifting towards the transmission of rate cuts
- Replacing “monetary policy remains restrictive” with “monetary policy is becoming meaningfully less restrictive” was widely seen as a reasonable compromise
- Likely shocks on the horizon, including from escalating trade tensions, and uncertainty more generally, risked significantly weighing on growth
- These factors could increase the risk of undershooting the inflation target in the medium-term
- Recent appreciation of the euro and the decline in energy prices, together with the cooling labour market and well-anchored inflation expectations, mitigated concerns about upside risks to inflation more generally
- It was argued that being prudent in the face of uncertainty did not necessarily equate to being gradual in adjusting the interest rate
- Full accounts
This article was written by Justin Low at www.forexlive.com.
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