Traders Pricing ECB Rate Hikes Clash With Dim Inflation Outlook
- Consumer-price gains seen falling short of target for 30 years
- That’s casting doubt on bets for a 10-basis-point hike by 2023
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Traders betting that the European Central Bank will raise rates in two years time are on shaky ground if market-based inflation expectations are anything to go by.
A gauge of the projected trajectory of consumer prices shows gains will remain short of the ECB’s inflation mandate over the next three decades. That’s casting doubt over a 10-basis-points interest-rate increase that is currently being priced in by the middle of 2023.