Former ECB vice-president says the hiking cycle will end in July

<p>Former ECB vice president Vitor Constancio says that falling inflation means that the final rate hikes from the Federal Reserve and ECB will be in July.</p><p>"Inflation came down again in the Euro Area and the US. HICP in EA was 5.5% (6.1% in May) and the US PCE was 3.8%. I expect the FED and the ECB to end hiking in July. The EA in particular is showing growing signs of weakness pointing to a recession," he <a href="https://twitter.com/VMRConstancio/status/1674776307597443072?s=03" target="_blank" rel="nofollow">tweeted</a>.</p><p>The former deputy to Mario Draghi noted the rapid decline in the Citi economic surprise index for the eurozone as a sign of a coming recession.</p><p>Earlier, Constancio also highlighted a paper arguing that US inflation was largely demand led, while in the eurozone it's been more of a result of supply shocks. </p><p>The paper, shows that eurozone core inflation “consists primarily of pass-through from past headline-inflation shocks, not economic overheating”. </p><p>That's another argument for the ECB to stop hiking.</p>

This article was written by Adam Button at www.forexlive.com.