ECB policymaker Fabio Panetta signals prolonged inflationary pressures, delaying rate cuts amid geopolitical risks.
European Central Bank policymaker Fabio Panetta stated inflation in the Eurozone will likely remain above 3% until early 2027, defying earlier expectations of a quicker decline. The remarks suggest persistent inflationary pressures, driven by energy costs and geopolitical uncertainty.
Panetta’s comments contrast with prior market assumptions of a faster return to the ECB’s 2% target. His hawkish tone implies reluctance to ease monetary policy soon, reinforcing a firmer stance on inflation control.
The Euro showed minimal reaction, with EUR/USD trading nearly flat at 1.1424. Panetta also cautioned that equity markets may be underestimating risks tied to the Iran conflict and tighter financial conditions.