ECBs Villeroy: We should and can avoid recession. They soft landing path is more likely

<p>ECB Villeroy on the economy and central bank policy:</p><ul><li>Our reliance on forward guidance was excessive, we should be more modest with future guidance.</li><li>We should expect more bond volatility, renewed increases would be another reason not to hike rates.</li><li>We have to discontinue our PEPP reinvestments in due time, and possibly earlier then the end of 2024.</li><li>On our inflation target, I am not fixated on 2% to the nearest decimal place.</li><li>The latest developments in Israel and the oil market shouldn't significantly change downward inflation trend.</li><li>We should and can avoid recession, a soft landing path is more likely.</li><li>The question to quickly shifted from "When will we stop hiking?" to "When will we start cutting?"</li><li>See rates plateauing for at least the next several meetings and the next few quarters.</li></ul><p>ECB Villeroy putting the kibosh on rate cut expectations</p>

This article was written by Greg Michalowski at www.forexlive.com.