ECB’s Knot: Markets risk underestimating September rate hike chances

The European Central Bank (ECB) Governing Council member Klaas Knot told Bloomberg on Wednesday that Investors betting against an interest rate increase next week are possibly underestimating the likelihood of it happening.

Additional Quotes:

A rate hike is a possibility, not a certainty.
Hitting the 2% inflation target by the end of 2025 is the bare minimum.
An economic slowdown is sure to damp demand, though inflation projections won’t differ much from the last round in June.

Market Reaction:

The shared current reacts little to the hawkish-sounding comments and trades with a mild positive bias, around the 1.0730-1.0725 region against the US Dollar (USD).