An ECB policymaker warns that persistent energy price pressures may prompt swift interest rate increases to curb inflation risks.
European Central Bank Governing Council member Martin Kocher indicated the ECB may not delay further interest rate hikes if energy prices fail to stabilize quickly. The remarks highlight growing concerns over inflation risks tied to the Middle East conflict and sustained high energy costs.
In April, the ECB deemed it reasonable to pause rate hikes, but Kocher now warns that prolonged energy price pressures could trigger second-round inflation effects. The length of the conflict and its impact on energy markets will be decisive factors in policy decisions.
The EUR/USD pair fell 0.26% to 1.1755 following the comments, reflecting market sensitivity to hawkish ECB signals. Medium- and long-term inflation expectations remain a key focus for policymakers, though no major shifts have been observed yet.