ECB's Schnabel says the energy shock is much more persistent than thought

Framing energy as persistent rather than transitory matters because it shifts the argument from looking through a supply shock to worrying about second-round effects in wages and core inflation, a distinction that in past episodes of this kind has steepened the debate over whether policy is restrictive enough rather than merely how long to hold. Remarks built around upside inflation risk from a known hawk tend to find their expression in the front end of the EUR curve and in how much of the easing path gets priced out, though a single official rarely moves the median on their own. The relevant question is whether centrist members echo the persistence framing in coming days or whether it remains a tail position; the former has been the setup that historically repriced ECB expectations durably. Worth noting is the sequence: such warnings typically precede an upward revision in staff energy and inflation projections, which then do the formal work of shifting the policy debate. As commentary rather than decision, the signal is directional and conditional on follow-through from colleagues.