ECB's Vujcic says ECB must be vigilant facing stagflation risk and officials will know soon whether they must act, adds if hikes are needed, better to start with a small move

The ECB's Vujcic highlights the rising concern over stagflation risks, signaling a cautious approach from the bank. By suggesting that any potential rate hikes should start small, the ECB may aim to balance inflation control without overly stifling growth. This implies a watchful wait on further macro data, which could lead to heightened market volatility in EUR and fixed income as participants gauge future policy adjustments.