Panetta Backs ECB Rate Hike as Iran War and Fuel Shortages Stoke Inflation

1 articles · Updated · Bloomberg · May 29

Fabio Panetta said the ECB has a case for raising interest rates, but warned against signaling any preset path for further tightening.
Rome remarks from the Bank of Italy governor tied that stance to the Iran war's persistence, rising inflation expectations, depleted fuel stocks and risks of fresh supply disruptions.
His message points to a one-step response to an energy-driven price shock rather than a broader commitment to multiple rate increases.
The intervention adds to the ECB's policy debate as officials weigh inflation risks from geopolitical turmoil against the danger of over-tightening.

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