An ECB report from Reuters cites a staff model forecast that sees rates peaking at 2.25%, citing four sources. That’s lower than the market-implied rate at just above 3%.
The model shows that 2.25% is needed to tame inflation or even less if it’s combined with QT.
The report also says that ECB policymakers gave it a ‘mixed reception’.
The market is pricing in an 81% chance of 75 bps on October 27 with the remainder at 50 bps.
