In today’s Comment we will do a redux – more second thoughts actually – on Thursday’s ECB meeting. Separately, we will preview tomorrow’s US CPI release. And while the CPI release probably won’t change the Fed’s calculus that is now in favor of another 75bps jumbo hike, the data is important enough that it deserves our attention.

Starting with the ECB, these days there are three dimensions in which the ECB is tightening policy: interest rates; Quantitative Tightening; and liquidity conditions in the banking system. President Lagarde commented on all three, and we want to let her speak in her own words. Here’s Lagarde giving calendar-based guidance on the rate hike cycle. She is saying that the rate hike cycle could end as soon as December or as late as March 2023:


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