Kazaks: If oil prices cause inflation expectations to become unanchored, the European Central Bank will raise interest rates

Golden Ten Data reported on May 14 that European Central Bank (ECB) Governing Council member Kazaks stated that if rising crude oil prices translate into higher inflation expectations, the ECB will need to raise borrowing costs. He said, "Oil prices are rising, and we are seeing this gradually start to push up inflation; if inflation expectations begin to worsen, the ECB will be forced to raise interest rates." The market and economists predict that the ECB will raise interest rates by 25 basis points at the June meeting.

Kazaks stated, "Currently, the financial markets expect a rate hike — I can neither confirm nor deny this," he said. "We will wait and see if this situation actually unfolds. However, if we look at scenario analysis and our forecast data, the current situation is indeed slightly more severe than the predictions under the initial baseline scenario."