ECB Schnabel: Current price shock cannot simply be looked through.
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ECB Schnabel (hawk) says: Current price shock cannot simply be looked through. Prices are already generating indirect and potentially second round effects We are not in a pre-war situation even after fall in oil prices. This article was written by Greg Michalowski at investingliv
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The desk interprets ECB member Isabel Schnabel's recent comments as a signal that the fallout from the Iran conflict could lead to persistent economic challenges, particularly in the Eurozone. Per the full note [source], Schnabel highlighted the potential for irreversible damage and noted reemerging supply chain disruptions, which could necessitate a tightening of monetary policy if inflation expectations continue to rise. This perspective aligns with our view that the ECB may need to act more decisively to combat inflation pressures, especially if energy price shocks materialize. The current market sentiment appears to be underestimating these risks, creating a potential disconnect that traders should monitor closely.