ECB's de Guindos says current shock is causing lower economic growth and higher inflation
From the original
Full report here De Guindos characterized the current situation as a global supply shock that will ultimately lead to a combination of lower economic growth and higher inflation. He said that while the overall net impact is inflationary, the resulting economic slowdown is already
Related speeches
4 itemsECB policymaker de Guindos says comparison to energy price shock in 2021-22 is not right
The desk interprets ECB Vice President Luis de Guindos' recent comments as a signal of cautious optimism regarding inflation risks, suggesting that the central bank is better positioned to respond than in previous energy shocks. Per the full note [source], de Guindos emphasized the need for patience and clarity in light of geopolitical tensions, particularly the conflict in Iran, which could impact growth indicators. This perspective aligns with a broader sentiment that the ECB will act prudently while monitoring economic data, particularly as inflation pressures appear less acute than in 2021-22. The consensus view among analysts indicates a target range for EUR/USD around 1.04 to 1.12, with our desk leaning towards the upper end of this spectrum.
Luis de Guindos: Interview with El País
The desk believes that the ECB's current cautious stance, as articulated by Vice-President Luis de Guindos, reflects a broader recognition of geopolitical uncertainties and economic fragility. Per the full note [source], de Guindos emphasized the need for prudence in monetary policy, particularly in light of rising energy prices and deteriorating economic confidence in Spain. This aligns with our consensus target for EUR/USD at 1.075, which sits comfortably within the range of expectations from other firms. Upcoming inflation data on June 2 will be critical in shaping market sentiment and potential ECB actions.
Luis de Guindos: Interview with Financial Times
The desk believes that the ECB's current cautious stance, as articulated by Vice-President Luis de Guindos, suggests a more tempered approach to interest rate hikes in light of the ongoing energy shock and geopolitical tensions. Per the full note [source], de Guindos emphasized the need for prudence, citing potential negative impacts on growth and consumer sentiment. With inflation expectations remaining stable and markets currently calm, the ECB's next moves will be closely scrutinized, particularly ahead of the upcoming CPI and interest rate decisions in June. The consensus target for EUR/USD remains at 1.075, with a range of 1.04 to 1.12, indicating a cautious outlook on the euro's strength against the dollar.
Deutsche Bank sees ECB leaving door open to hike in June as inflation expectations surge
The desk interprets Deutsche Bank's recent commentary as a signal that the ECB is navigating a precarious balance between rising inflation expectations and slowing growth. Per the full note [source], the ECB's decision to hold rates steady was expected, yet the accompanying data revealed a notable jump in one-year inflation expectations to 4.0%, the highest since 2023. This shift, combined with tightening credit conditions, suggests that the market is right to fully price in a rate hike by June. The desk sees this as a pivotal moment for the eurozone economy, where inflationary pressures could force the ECB's hand despite growth concerns.
More from INVESTINGLIVE
5 items- INVESTINGLIVEMay 27, 2026
ECB policymaker Makhlouf: I haven't seen second-round effects on inflation emerging
- INVESTINGLIVEMay 27, 2026
Fed's Kashkari says far too soon to predict what the next policy move should be
- INVESTINGLIVEMay 27, 2026
RBNZ Gov Breman says all policy setters agree on hikes, but not on timing
- INVESTINGLIVEMay 27, 2026
BOJ signals loose conditions persist as Ueda lays groundwork for rate hike ahead
- INVESTINGLIVEMay 27, 2026
Australia April CPI slows to 4.2% but core inflation creeps to highest since 2024