A Governing Council member cites persistent upside inflation risks as justification for additional monetary tightening.
European Central Bank policymaker Gediminas Šimkus stated the ECB may raise interest rates at least once more to anchor inflation expectations amid lingering upside risks. The move aims to ensure price stability over the medium term, aligning with the bank’s 2% target.
Šimkus’s remarks follow recent ECB communications emphasizing vigilance on inflation dynamics. Markets had priced in a potential pause after July’s hike, but policymakers continue to highlight persistent price pressures as a key concern.
The EUR/USD pair showed limited reaction but remains supported by expectations of further ECB tightening. Traders are balancing the ECB’s stance against upcoming Federal Reserve decisions, which could influence the currency pair’s trajectory.