ECB Executive Board member signals persistent inflation pressures despite falling oil prices, urging policy vigilance.
European Central Bank Executive Board member Isabel Schnabel cautioned that the current price shock cannot be dismissed, citing emerging second-round effects. Her remarks underscore concerns over inflation persistence even as oil prices decline from recent highs.
Schnabel noted the economy is not in a pre-war situation, contrasting with earlier energy-driven inflation dynamics. The comments follow mixed signals from labor markets, with US jobs growth slowing to 57k, potentially easing inflationary pressures.
Markets reacted cautiously, with bonds poised for a rally as inflation expectations cool. The ECB’s hawkish stance contrasts with growing speculation of a dovish pivot amid weakening economic data.