ECB must be prepared for further rate hikes if inflation turns higher, says Ireland’s Makhlouf
AI Market Summary
ECB Governing Council member Makhlouf signaled readiness to raise rates beyond the widely expected move to a 2.5% deposit rate if inflation risks rise, arguing policy is not yet restrictive. With euro area inflation at 3.3% and growth data stronger than expected, rhetoric reinforces higher-for-longer expectations. This should support EUR via rate differentials while tightening financial conditions, weighing on rate-sensitive risk assets.
Impact level
● Medium
Affected assets
NCFXEUR2USD/USDT+0.09%
AI Insight · NCFXEUR2USD/USDTAI Insight
▼ Bearish
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ECB Governing Council member and Central Bank of Ireland Governor Gabriel Makhlouf said he is uneasy that euro zone inflation is staying above 3% while growth has been slightly stronger than expected. He argued that even if the deposit rate rises to 2.5%, it would not restrain economic activity. His remarks suggest the ECB may need to keep raising interest rates.
