ECB's Schnabel warns inflation risks remain despite easing energy prices
ECB board member Isabel Schnabel said inflation risks remain tilted to the upside despite easing energy prices after the US-Iran ceasefire, signaling further rate hikes may be needed.
European Central Bank Executive Board member Isabel Schnabel warned on Saturday that inflation risks remain tilted to the upside despite the recent decline in energy prices following the US-Iran ceasefire, reinforcing expectations that the central bank may need to raise interest rates further.
Speaking at the Petersberger Summer Dialogue in Germany, Schnabel said uncertainty surrounding the economic outlook remains elevated, even though the agreement between Washington and Tehran has reduced the likelihood of more severe disruptions to global energy supplies. While oil prices have eased in recent days, Schnabel cautioned that prices are still expected to remain elevated, keeping upward pressure on consumer prices.
For energy commodities traders, the ECB's hawkish stance could support the euro, potentially weighing on dollar-denominated oil prices in the short term. However, the broader implication is that tighter monetary policy may slow economic growth, dampening demand for crude and refined products. Traders can monitor real-time price moves on NowPrice's live fuel dashboard to track how rate expectations impact energy markets.
Looking ahead, markets will focus on upcoming eurozone inflation data and the ECB's next policy meeting in July. Any further hawkish signals from policymakers could reinforce the current rate hike trajectory, while a sharper-than-expected slowdown in inflation might shift expectations. The interplay between energy prices and central bank policy remains a key driver for oil and gas markets in the coming weeks.