ECB’s Kazimir says second round effects are costly to reverse, ECB must act before they are visible; at least one more rate hike will be needed

Commentary of this kind from a Governing Council member is a recurring feature of tightening cycles, where individual officials stake out positions ahead of meetings and the market reads the distribution rather than any single voice. Kazimir has consistently sat on the hawkish wing of the Council, so remarks from him carry less marginal information than identical language from a centrist or from the Executive Board; the established pattern is that front-end repricing follows the perceived centre of gravity, not the tails. The framing here is notable: arguing that second-round effects must be pre-empted rather than observed is the classic case for acting before wage and services inflation confirm the overshoot, which historically biases toward a higher terminal rate rather than merely a later pause. The distinction that matters for pricing is between one more hike and done versus one more hike with the door open, since it is the terminal level and its duration that drive the belly of the curve and the short end of Euribor strips. The usual sequence is that such remarks are tested at the next meeting and against incoming wage settlements and negotiated pay data, with follow-on commentary from other members either reinforcing or diluting the signal. As single-member commentary rather than a decision, the signal is directional.