A governing council member says inflation risks warrant a cautious shift toward restrictive rates at next month’s meeting.
European Central Bank governing council member Yannis Stournaras said a June interest rate increase is now highly likely, citing the need for careful adjustment toward restrictive policy. The comments were made in an interview published Thursday during European trading hours.
Stournaras emphasized balancing inflation control with economic stability, aiming to prevent second-round effects without excessive damage to activity. Markets showed little immediate reaction, with EUR/USD trading 0.13% lower at 1.1610 after recovering earlier losses.
The ECB targets 2% inflation and adjusts rates to maintain price stability. Its governing council meets eight times a year to set monetary policy, with decisions influencing the euro’s strength.