ECBs Wunsch: it seems that Iran shop has disappeared. Have not seen much 2nd round effects
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ECBs Wunsch is saying: it seems that Iran shop has disappeared We haven't seen that much second round effects Maybe we have to do more but situation doesn't ask for significant tightening. Not excluding another move, but let's not wait too long. Comments seem in contrast with ECB
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ECB's Schnabel warns on inflation: Iran conflict shock still not over despite oil drop
ECB Schnabel: Some damage from Iran War will be hard to reverse
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.