ECB Unlikely to Raise Rates Solely Due to Energy Price Surge, Says German Economist

The chief economist of Germany's KfW Bank, Dirk Schumacher, stated in a report that the European Central Bank (ECB) should not raise interest rates solely due to rising energy prices. According to Jin10, Schumacher emphasized that monetary policy tightening would only be necessary if second-round effects create a self-reinforcing dynamic. Currently, the duration of price increases and the related data are insufficient to compel the ECB to react. However, he noted that the ECB would be prepared to tighten monetary policy if necessary. Schumacher mentioned that during Thursday's press conference by ECB President Christine Lagarde, the term 'vigilance' is likely to be frequently mentioned.