ECB's Schnabel: If risks materialize, further rate hikes may be necessary

<p>The ECB has published an interview with executive board member Isabel Schnabel.</p><ul><li>Overall, the recent news on inflation is encouraging</li><li>Core inflation has proven more stubborn</li><li>We cannot take it for granted that inflation will only move downwards from now on, because we could have new supply side shocks</li><li>we cannot say that we are at the peak or for how long rates will need to be kept at restrictive levels</li><li> I still see upside risks to inflation</li><li>Cites wages as upside risk</li><li><a href="https://www.ecb.europa.eu/press/inter/date/2023/html/ecb.in231006~c18d34f7a8.en.html" target="_blank" rel="nofollow">Full text</a></li></ul><p>The market is pricing in just a 20% chance of a further hike, with a first cut full priced in next July. These comments highlight the 'possibility' of rate hikes but that only reinforces that the ECB's baseline is to hold rates here.</p>

This article was written by Adam Button at www.forexlive.com.