ECB's Sleijpen says energy shock is quite persistent

Single-official remarks of this kind matter mainly for what they signal about the committee's reading of supply-side inflation: characterising an energy shock as persistent implies the ECB treats it as something to be looked through only partially, which historically has biased the reaction function toward holding rates higher for longer rather than easing into weakness. The distinction worth drawing is between first-round effects, which central banks conventionally tolerate, and second-round pass-through into core and wages, which is what persistence language is pointing at; the former steepens or flattens the front end on timing, the latter shifts the perceived terminal and neutral rates. Governing Council members have on past occasions used this framing to prepare the ground for tolerance of above-target headline inflation, and the tell has been whether hawks and centrists converge on the same vocabulary. Follow-ons are other officials' energy commentary, any revision to staff energy and inflation assumptions at the next meeting, and how gas and power forwards feed into the near-term HICP path. As commentary rather than a decision, the signal is directional, and Bunds and the front end of the EUR curve are the natural transmission points.