ECB's Schnabel
ECB's Schnabel

The ECB has published an interview with executive board member Isabel Schnabel.

  • Overall, the recent news on inflation is encouraging
  • Core inflation has proven more stubborn
  • We cannot take it for granted that inflation will only move downwards from now on, because we could have new supply side shocks
  • we cannot say that we are at the peak or for how long rates will need to be kept at restrictive levels
  • I still see upside risks to inflation
  • Cites wages as upside risk
  • Full text

The market is pricing in just a 20% chance of a further hike, with a first cut full priced in next July. These comments highlight the 'possibility' of rate hikes but that only reinforces that the ECB's baseline is to hold rates here.