ECB's Rehn says that ECB forecasts are facing extremely high and widespread uncertainty; energy surger is nearer to the adverse scenario, Econostream reports

Remarks from Governing Council members flagging that outcomes are tracking nearer the ECB's adverse scenario than its baseline follow a familiar pattern in this institution's communication: the scenarios published alongside projections tend to become the frame through which officials signal discomfort with the prevailing path before any formal shift. The transmission here splits two ways. An energy surge nearer the adverse case is, in isolation, stagflationary, but Rehn's own framing that higher long rates slow growth and blunt pass-through to prices and wages reads as a second-round-effects argument, which historically has been the dovish counterweight to headline-energy-driven hawkishness. Rehn has prior form as a centrist whose interventions often prefigure where the consensus ends up rather than staking out a pole, so the tone carries more weight than it would from an outlier. The reference to a sudden reversal in AI-linked market sentiment is notable as financial stability risk entering the policy conversation, a channel that has tended to compress front-end rate expectations quickly when it materialises. The follow-ons are whether other Council members adopt the adverse-scenario framing ahead of the next meeting and how the energy leg develops in the interim; as single-member commentary, the signal is directional rather than a path commitment.