ECB’s Sleijpen cites lingering inflation risks from wage-price spirals, even as market expectations forecast declining oil costs.
European Central Bank executive Klaas Knot Sleijpen stated that while a repeat of 2022’s inflation surge appears less likely, it cannot be ruled out entirely. The key concern remains second-round effects, such as wage increases feeding into higher prices, despite market expectations of declining oil prices ahead.
Recent data shows inflation in the eurozone has moderated, but core inflation remains sticky. Analysts had anticipated a more definitive signal on rate cuts, though uncertainty around energy prices and labor market dynamics persists.
The euro edged lower by 8 pips to 1.1599 in early trading, reflecting cautious sentiment ahead of Fed official Kevin Warsh’s upcoming remarks.