Hawkish is a question of probability distributions. ECB President Mario Draghi effectively cut off the left-hand tail of the distribution at his press conference this morning, announcing that 1) the deflation alert is over, 2) there will be no more rate cuts, and 3) there will be no more targeted long-term financing operations (TLTRO). That was after the ECB raised its inflation forecast from 1.3% to 1.7%. There’s a magic number in all of this, and that is 2%. In Germany (as in China) if inflation goes above 2%, the voters will demand action to do something about it. That’s when a combination of negative interest rates and price inflation wipes out one’s savings at a visible horizon. No surprise that the German 10-year Bund yield spiked by 5 bps as soon as the magic word TLTRO passed Draghi’s lips and the Euro jumped half a big figure against the dollar, from 1.0540 to 1.06.