ECB’s Schnabel: ECB may need to act if energy price rises more persistent

“Rising energy prices may force the European Central Bank to stop ‘looking through’ high inflation and act to temper price growth,” said ECB board member Isabel Schnabel said on Saturday per Reuters.

“Green transition poses upside risks to medium-term inflation,” adds ECB’s Schnabel while speaking via video link to the annual meeting of the American Finance Association.

The ECB policymaker also said, “So far, however, there are no signs of broader second-round effects of high inflation.”

The Financial Times (FT) adds to the commentary with an additional statement from ECB’s Schnabel stating, “There are instances in which central banks will need to break with the prevailing consensus that monetary policy should look through rising energy prices so as to secure price stability over the medium term.”

FX reaction

The news may help the EUR/USD prices to keep Friday’s daily gains, the strongest in a month even as the major currency pair struggles around 1.1350 during early Monday morning in Asia.

Read: EUR/USD Price Analysis: 50-day EMA, ascending triangle challenge recovery below 1.1400