European Central Bank (ECB) Governing Council member Gabriel Makhlouf said on Friday that without a clear timeline for the end of the conflict in the Middle East, he is concerned about a “higher-for-longer” energy price scenario, per Reuters.
Key takeaways
“Inflation expectations need to be closely monitored for signs of de-anchoring.”
“I will be paying close attention to indirect effects such as cost-push inflation in production, transportation, and services.”
“Potential second-round effects via wages will take longer to show up, given the staggered nature of wage-setting.”
Market reaction
EUR/USD holds its ground in the American session and trades in positive territory above 1.1750.
Source: https://www.fxstreet.com/news/ecbs-makhlouf-concerned-about-higher-for-longer-energy-price-scenario-202605011303
