ECB Signals June Rate Action if Iran War Threatens 2% Price Goal
Updated
Updated · Bloomberg · May 12
ECB Signals June Rate Action if Iran War Threatens 2% Price Goal
2 articles · Updated · Bloomberg · May 12
Joachim Nagel said the ECB could act on interest rates next month if the Iran war endangers euro-zone price stability, keeping a possible hike on the table.
April's policy meeting already included discussion of higher borrowing costs, but officials now want more evidence on how large and persistent the Middle East conflict's effects will be on inflation and growth.
Nagel, who sits on the Governing Council and heads Germany's Bundesbank, said the ECB will keep analyzing incoming economic data before making its June decision.
The warning underscores how the conflict has become a new risk for the ECB's inflation outlook, potentially complicating its balance between containing prices and supporting growth.
Is Europe's economy heading for a 1970s-style stagflation crisis due to the ongoing Iran war?
With war fueling inflation and recession fears, can the ECB's interest rate hikes do more harm than good?