Finnish central bank chief Olli Rehn says energy shocks must be assessed for broader inflation risks before adjusting monetary policy.
European Central Bank policymaker Olli Rehn stated that oil prices alone should not dictate monetary policy decisions. He emphasized the need to evaluate whether energy shocks spread to inflation expectations, wages, and core inflation before taking action.
Rehn noted the current energy shock is less severe than the 2022 crisis but warned of potential risks from a prolonged conflict in the Strait of Hormuz. The ECB remains focused on maintaining inflation around its 2% target over the medium term.
EUR/USD showed little immediate reaction to Rehn’s comments, trading near 1.1715 after a slight rebound from an intraday low of 1.1695.