• Governor of the Austrian National Bank and ECB Governing Council member Martin Kocher said the ECB will not be able to avoid an interest rate hike in the near future if inflation does not ease significantly.
  • Kocher stated that forgoing a rate hike in April was justifiable, but the central bank must not wait too long to tighten monetary policy if energy prices, driven by the Iran conflict, do not fall quickly.
  • He emphasized that it is ’not serious’ to commit weeks before the next rate decision on June 11.
  • The war in the Middle East threatens the nascent recovery in Europe; the key factor is how long the conflict lasts.
  • Kocher warned of potential second-round effects: if the war continues and energy prices remain high, the risk of higher wage settlements and additional price dynamics increases.

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