ECB's 2% Rate Hold Was Close Call as Inflation Hits 3%
Updated
Updated · Reuters · May 28
ECB's 2% Rate Hold Was Close Call as Inflation Hits 3%
8 articles · Updated · Reuters · May 28
April 29-30 accounts showed several ECB policymakers would not have opposed a rate increase, saying the value of waiting had diminished as inflation risks intensified.
3% inflation last month and a prolonged Iran war have kept energy prices elevated, making it harder for the ECB to treat the shock as temporary.
The bank still held at 2% because it lacked evidence that higher energy costs were feeding into wages and broader prices through second-round effects.
June is now the key meeting, with policymakers expecting fresh data and projections; markets fully price a first hike by July and a second by October.
Beyond rate hikes, how can Europe secure its economy from future energy shocks caused by geopolitical conflicts?
With the Strait of Hormuz closed, is the ECB's monetary policy powerless against war-driven inflation?