JPMorgan Strategist: ECB's High Threshold for Rate Hikes

On April 30, JPMorgan Private Bank strategist Madison Faller stated in a report that the European Central Bank's policy statement on Thursday suggests a high threshold for committing to rate hikes. According to Jin10, Faller noted that the ECB's reaction function is characterized by 'maximum optionality.' She mentioned that given the uncertainty, market expectations for nearly three rate hikes before the end of the year seem premature. 'Core inflation in March did not reaccelerate, and long-term expectations remain quite stable,' she said, adding that without clearer spillover effects from rising energy prices, the risk leans towards pricing fewer rate hikes. JPMorgan anticipates one rate hike this year, which may limit the euro's gains against the dollar to around 1.18-1.20.