Bundesbank chief Joachim Nagel warns inflation will remain above target through 2027, keeping July and September policy options open.
European Central Bank Governing Council member Joachim Nagel stated Wednesday that monetary policy remains on an upward trajectory due to persistent inflation risks. He emphasized that inflation will stay elevated this year and above the ECB’s 2% target through 2027, dismissing June’s rate hike as a precautionary move.
Nagel’s remarks align with his Tuesday warning that inflationary pressures are likely to remain high. Markets had anticipated a hawkish stance, with no immediate reaction in EUR/USD, which traded 0.2% lower near 1.1400.
The ECB’s next policy decisions are scheduled for July and September, with options left open for further tightening. The central bank’s primary mandate remains price stability, typically achieved through interest rate adjustments.