ECB's Nagel says the longer the conflict lasts, the greater the risk that inflation will remain high without ECB intervention and starting point much better than in 2022
- June rate hike may be warranted if the inflation outlook does not improve significantly
Context
Nagel’s comments suggest a hawkish tone from the ECB, indicating that prolonged conflict could necessitate intervention to manage inflation. The mention of a potential June rate hike highlights the bank's readiness to act if inflation doesn't improve, which could have significant implications for euro and bond markets as investors recalibrate expectations for monetary policy.
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