ECB policymaker Olli Rehn warns inflation expectations risk de-anchoring due to energy price pressures amid geopolitical tensions.
European Central Bank Governing Council member Olli Rehn emphasized the importance of anchoring inflation expectations during Wednesday’s trading session. Rehn cited elevated energy prices and supply constraints linked to the US-Iran standoff over the Strait of Hormuz as key risks to price stability.
The ECB’s primary mandate targets inflation at around 2%, but recent geopolitical developments have disrupted global inflation projections. Rehn noted no clear signs of second-round effects, with wage growth remaining moderate so far.
The ECB’s next policy decision will be closely watched as markets assess whether current conditions warrant further monetary tightening or a pause.