European Central Bank Governing Council Member: Even if the US and Iran reach a peace agreement, it will not weaken the rationale for interest rate hikes

Golden Finance reports: On June 3, according to the UK Financial Times, ECB Governing Council member Wünscher said that the peace agreement between the US and Iran reached before next week’s European Central Bank meeting will not weaken the rationale for further interest rate hikes. Wünscher said, “If a peace agreement is indeed reached on the eve of the meeting, it will be part of the discussion. But we cannot know whether it will be lasting or credible.” He hinted at supporting an ECB rate hike of 25 basis points. He believes that if the conflict remains unresolved, discussions “before policymakers set interest rates on June 11” will be “quite straightforward.” If the US and Iran reach a peace agreement, the discussion “might be a little less straightforward. But the rationale for a rate hike may still exist, just not as strongly.” He said, “At some point, we cannot let the market bear everything. We need to make our position clear.” (Jin10)
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