ECB's Schnabel sees rising inflation risk from Iran war

ECB board member Isabel Schnabel said euro zone inflation risk has risen as companies and households respond to surging oil prices and supply bottlenecks. Her comments explicitly hint at possible interest rate increases, reinforcing a more hawkish policy bias. The message is negative for bonds and rate-sensitive assets, with broader implications for euro-area markets.

Analysis

ECB board member Isabel Schnabel said euro zone inflation risk has risen as companies and households respond to surging oil prices and supply bottlenecks. Her comments explicitly hint at possible interest rate increases, reinforcing a more hawkish policy bias. The message is negative for bonds and rate-sensitive assets, with broader implications for euro-area markets.