ECB President Lagarde says wages not showing material response to energy shock

Comments of this kind sit inside the ECB's long-running second-round-effects framework: the question that has driven policy through past energy shocks is not the shock itself but whether negotiated wages absorb it, since that is what turns a relative-price move into persistent core inflation. A President saying wages are not responding materially is a dovish signal on that specific channel, pointing toward looking through the shock rather than pre-empting it, and in comparable episodes that framing has weighted on the front end and on inflation expectations pricing rather than on the long end. The distinction that matters is between negotiated wage settlements, which the ECB tracks as its preferred gauge and which move slowly, and shorter-horizon indicators such as vacancy data and trackers, which can turn first; remarks of this sort raise the sensitivity of the next wage prints to the statement. Presidential framing of this kind also tends to preview the staff forecast round, where the wage assumption has historically been the swing variable in the medium-term inflation projection. The follow-ons are whether other Governing Council members echo the assessment and how it sits against the next negotiated-wage release. As verbal steering rather than a decision, the signal is directional on reaction function, not on timing.