ECB Governing Council Member Wunsch: Reasons for Further Rate Hikes Are Less Clear Than Before

On June 30, ECB Governing Council Member Wunsch stated that the reasons for the European Central Bank to raise interest rates again are not as clear as they were previously. He pointed out that with the agreement reached between the U.S. and Iran, the root causes of the shocks have 'more or less' disappeared. He stated, 'We may still need to raise rates again, and the market pricing reflects this, but the necessity is not as strong as we anticipated in June. If it is determined that another rate hike is needed, I tend to act quickly. But that does not necessarily mean it will be in July.' Wunsch noted that inflation will experience some second-round effects, but he is not overly concerned. He said, 'We know that inflation will be above the target level for several quarters. So if the data indicates that another rate hike is necessary, I will not delay for too long. But I will not commit to any specific timeline.'