- The uncertainty caused by the conflict in the Middle East is very high
- But from the data we currently see, there is no urgent need to raise interest rates yet
- We are not in a hurry
- We still have the great luxury of collecting data and forming our point of view
- But if necessary, we will of course take action (to take political action).
- The impact of the conflict in the Middle East on the real economy is only gradually worsening
- We can monitor what is happening and then make a decision when we have the broader picture
- Full version (may be portals)
His comments fit more or less with what the rest of his peers have said in the past two weeks. This means that the ECB wants to be patient and wait for further developments between the US and Iran before it really wants to take any action. This is especially so since the conflict continues for a longer period. With the announcement of the ceasefire extension, this means that we may see another week or two with a similar status quo.
Given the current situation, markets are also more inclined towards the ECB remaining in a waiting mode next week. The odds of a rate hike are around 22% but it looks like they will need to be eased further before the meeting. Although the odds of a move in June are currently at 68%.
