ECB Governing Council member rules out second-round effects but pledges action if inflation outlook worsens.
European Central Bank Governing Council member Martin Kocher stated there is no hard evidence of second-round inflation effects but warned the ECB will act if the inflation outlook deteriorates. His remarks highlight heightened vigilance amid concerning oil market developments and weak, though not recessionary, growth forecasts.
Kocher’s comments contrast with recent communication, reflecting a mildly hawkish tilt. The ECB’s Speechtracker score of 6.2/10 remains below the historic average of 6.4/10, but the emphasis on conditional tightening underscores a bias toward action on upside inflation surprises.
The EUR/USD pair rose 0.11% to 1.1385 following the remarks, as markets priced in the potential for policy adjustments. Kocher’s focus on deteriorating medium-term inflation expectations and oil market risks reinforced the euro’s modest strength.