ECB Officials Stay Alert as Lane Shifts Focus to Price Pipeline

ECB officials said the inflation shock from the Iran war can’t yet be declared over, even though hostilities have largely ceased. The message adds uncertainty to the inflation outlook and implies a more cautious stance on policy until inflation risks dissipate. This guidance is likely to keep rate expectations more volatile for euro-area assets.

Analysis

ECB officials said the inflation shock from the Iran war can’t yet be declared over, even though hostilities have largely ceased. The message adds uncertainty to the inflation outlook and implies a more cautious stance on policy until inflation risks dissipate. This guidance is likely to keep rate expectations more volatile for euro-area assets.