The June ECB hike is described as a mistake, but an understandable one. Decades of Bundesbank legacy still shape decision-making. Add the impossibility of using transitory after the last cycle, and the awkward MOU timing, and the hike is what came out.
"Was it a mistake? In one word, yes or no, I think yes. But I think it's understandable. And we've talked about this before, just with the history of the ECB, with the history of the Bundesbank, you know, going way back, decades back, and they're wanting to show their, you know, credibility around inflation fighting way back, decades ago, the Bundesbank, as I say. And then even now, I think, actually, when I was sort of looking for you around a few things, just the transitory word, right, which nobody can mention, for obvious reasons. But in this case, and you say, you know, we had the mentioning of the MOU, you know, and the timing was slightly tricky for them. But I think when you put that all together, even just those couple of factors, very strong factors with ECB decision making, then I think that's why they took that decision."
💬 Discussion
The June ECB hike is described as a mistake, but an understandable one. Decades of Bundesbank legacy still shape decision-making. Add the impossibility of using transitory after the last cycle, and the awkward MOU timing, and the hike is what came out.