Schnabel Says ECB Should Not Rush Interest Rate Hikes

Isabel Schnabel says the ECB should not rush to raise rates while analyzing if inflation is entrenched. She noted that the bank will act if price growth persists.

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Isabel Schnabel, a member of the European Central Bank Governing Council, has stated that the bank should not rush to increase interest rates in response to rising inflation. During a lecture in Zürich, Schnabel argued for a cautious approach, suggesting that policymakers should take the time to determine if the current price shocks are becoming a permanent part of the economic landscape.

"We have the time to look at the data and to analyse what is actually happening, whether there is evidence of second-round effects, how strong the demand environment is, and how likely it is that this inflation shock is becoming entrenched in inflation expectations, and also in wage growth."
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