ECB's Dolenc says don't see second-round effects yet and the labour market isn't so tight anymore, adds must be vigilant on inflation data

Comments framed around 'second-round effects' sit inside a debate that has run through every recent ECB tightening cycle: whether wage settlements embed past inflation into the path, since it is that transmission, rather than the initial price shock, that governs how long restrictive policy must stay. The two-part message here is the familiar one, no visible second-round dynamics and a loosening labour market on one side, vigilance on inflation data on the other, and officials from smaller member states have tended to occupy the cautious middle of the Governing Council rather than lead it, so the remarks matter more as confirmation of consensus than as a signal of intent. The reference to approaching a restrictive stance is language that has historically marked the later stages of a tightening campaign, when the question shifts from how much more to do to how long to hold. The TPI mention follows the established pattern in which policymakers invoke the backstop to separate spread concerns from the policy debate; in past episodes that separation has been credited with letting the ECB hike through widening periphery spreads without the tool being deployed. Worth noting is the conditional framing on market tightening doing part of the work, which ties the policy path to financial conditions rather than to data alone. As commentary from a non-core member rather than a decision, the read is directional; the follow-ons are whether Executive Board members echo the restrictive-stance framing and how the next wage and negotiated-pay prints bear on the second-round question.