• The ECB will remain comfortably on hold as far as the eye can see. Yes, economic growth is picking up. And yes, German fiscal stimulus should kick in. But at the same time, the labor market is cooling, wage growth is easing, and easier German fiscal policy is being offset by tighter policy elsewhere;

• Tepid bank lending conditions suggest that ECB policy is probably a bit too tight. But there is nothing the ECB can do, given budding price pressures in household and business survey data, and the fact that annual core inflation readings have stabilized just above two percent;

• Don’t believe the hype that is FX-driven ECB rate cuts. The hurdle for such a move is basically insurmountable. It would require the bottom falling out under the greenback and the Europeans finding the courage to make such an obvious and contentious move. Not on my watch.

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