ECB's Rehn says it is unclear the war effect on medium term inflation, rate decisions not locked in beforehand
- Monetary policy should not be based on a single price, such as oil; it should be based on the economy as a whole.
- Impact of the war on inflation is not straightforward.
Context
The comments from ECB's Rehn indicate a cautious approach regarding inflation and rate decisions in light of geopolitical tensions. His emphasis on not tying policy solely to oil prices suggests a broader evaluation of economic factors, which might signal flexibility in the ECB's rate path depending on evolving economic conditions. This uncertainty could affect EUR sentiment and reflect changes in fixed income markets as the ECB navigates these complex influences.
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