ECB's Wunsch Backs 25-Bps Hike if Inflation Surprises Persist as Markets Price 36 Bps
Updated
Updated · investinglive.com · Jun 19
ECB's Wunsch Backs 25-Bps Hike if Inflation Surprises Persist as Markets Price 36 Bps
1 articles · Updated · investinglive.com · Jun 19
Summary
Wunsch said he would support another 25-basis-point ECB rate hike if incoming inflation data keeps overshooting forecasts, citing a recent pickup in euro zone services inflation.
The Belgian policymaker said there is no need to rush if data stays mixed, but persistent upside surprises would warrant precautionary tightening.
He defended last week's ECB increase, arguing it was justified while inflation was rising and uncertainty remained high, and said real interest rates had actually edged lower.
Wunsch added the ECB would still have room to cut later if pressures ease, though softer wage growth and calmer Iran-related tensions could support looking through the recent energy-driven spike.
Markets are pricing about 36 basis points of tightening by year-end, including a 67% chance of another hike in September, as Wunsch called for clearer data-dependent ECB guidance.