ECB's Wunsch Flags Possible 25-Basis-Point Hike as Oil Could Fall Below Pre-War Levels
Updated
Updated · Reuters · Jun 19
ECB's Wunsch Flags Possible 25-Basis-Point Hike as Oil Could Fall Below Pre-War Levels
3 articles · Updated · Reuters · Jun 19
Summary
Pierre Wunsch said the ECB could still raise rates by another 25 basis points if services inflation stays firm, arguing policymakers risk moving too late if they wait until September.
Oil prices are now falling, he said, and absent second-round effects on broader prices and wages, that should pull inflation lower and keep policy decisions data-dependent meeting by meeting.
Wunsch also said an oil glut in 2027 could push crude within a year below pre-war levels, citing longer-lasting demand destruction and a shift toward EVs, heat pumps and supply security.
He said the ECB never discussed a 50-basis-point move in June, defended the earlier 25-basis-point hike as reasonable under uncertainty, and suggested prolonged 'meeting by meeting' guidance may eventually need more conditional signaling.