ECB Executive Board Member: Inflation Still Faces Upside Risks, Further ECB Rate Hikes Expected

```htmlJinse Finance reported that on June 27, Isabel Schnabel, a member of the European Central Bank’s Executive Board, warned that even if a US-Iran peace agreement reopens the Strait of Hormuz, price pressures may be greater than expected. Speaking at an event in Germany on Saturday, Schnabel stated, “Food, goods, and services inflation face upward risks,” and added, “Energy price shocks could intensify broader inflation dynamics.” Schnabel welcomed the recent decline in energy prices due to the prospects of a US-Iran peace agreement, but cautioned that this is not a reason to relax vigilance. She said, “Uncertainty remains very high, but the announced peace agreement has reduced the likelihood of negative scenarios.” However, since the reopening of the Strait of Hormuz will need to be gradual, oil prices are expected to continue rising. Schnabel, considered the most hawkish member of the Governing Council, reiterated: “It is expected that the European Central Bank will further raise interest rates in order to bring the inflation rate back to the 2% level in the medium term.” She commented, “Consumer inflation expectations have risen, but there is currently no sign of wage increases.”```