Central Bank Watcher: Go your own way

With the hump in US services inflation looking more protracted, markets seem to have concluded that the Fed won’t be among the first of the developed market’s central banks to reduce interest rates. We concur that the ECB will ‘go its own way’ and begin easing monetary policy sooner, likely starting with a 25 bps reduction at the June meeting, which seems to be the current working assumption of the council.