ECB's Lagarde welcomes Iran deal but inflation fears linger
Lagarde said the ceasefire could help reopen the Strait of Hormuz, while Nagel said euro-zone inflation would stay high for months.
- On Monday, ECB President Christine Lagarde welcomed the US-Iran ceasefire, saying it could help reopen the Strait of Hormuz, though Bundesbank President Joachim Nagel cautioned it offers no immediate relief for high euro zone inflation.
- Last week, the ECB raised interest rates for the first time in nearly three years to curb inflation before energy cost surges from the Iran war supply disruptions spread further across the euro zone economy.
- Noting that restoring oil supplies will take months, Nagel stated "no relief is in sight for the foreseeable future" and warned inflation could rise when German government measures limiting energy prices expire.
- Slovakian central bank governor Peter Kazimir suggested oil supply damage requires further policy tightening, as Nagel reaffirmed all options remain open for the July 22-23 policy meeting.
- Financial investors pared back expectations for rate hikes on Monday, now anticipating only one additional increase; Latvian governor Martins Kazaks stated the ECB's mission to contain medium-term price pressures remains incomplete.
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The return to normal will necessarily be slow and disruptions on supply chains will continue to affect the world economy. In Europe, growth is expected to decline by 0.4 percentage points in 2026, to 0.8%.
SO WHO WON THIS WAR?
by Jim Quinn, The Burning Platform: I think you need to assess where we stand now, versus where we stood on February 28. The Strait was fully open on 2/28. Now it will be open, with some sort of toll to Iran. We probably lost/used up at least $150 billion of equipment/facilities/arms. Trump has obligated […]
The American President is counting on inflation to fall after the opening of the Hormuz road. Nevertheless, the framework agreement with Tehran is not easy to sell domestically.
"There is no relief in sight in the near future," stressed the member of the Council of the European BC
ECB’s Lagarde welcomes Iran deal, Nagel cautions on lasting inflation
PARIS/FRANKFURT, June 15 (Reuters) - ECB President Christine Lagarde on Monday welcomed news of a U.S.-Iran ceasefire, saying it could help reopen the Strait of Hormuz, although fellow policymaker Joachim Nagel cautioned it would bring no immediate rel...
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