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ECB Official Dismisses Second-Round Inflation Worries
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In Short: European Central Bank (ECB) Governor of the Bank of Portugal, Santos Pereira, dismissed fears of second-round inflation effects during the European trading session.
European Central Bank (ECB) Governor of the Bank of Portugal, Santos Pereira, dismissed fears of second-round inflation effects during the European trading session.
Pereira's comments come in the context of current inflation and core inflation levels being significantly lower than those observed during the 2022 energy crisis.
He noted that other goods prices do not indicate any de-anchoring of inflation expectations, reinforcing the ECB's primary mandate to maintain price stability around 2%.
According to ING’s Francesco Pesole, the Swiss National Bank (SNB) held rates but took a dovish stance, downplaying second-round inflation effects and adjusting its foreign exchange strategy.
Despite an upward revision to its inflation projections, SNB policymakers signaled no concerns about second-round effects, viewing the price shock as temporary.
Against the backdrop of the Federal Reserve's hawkish stance, a two-day rally in oil prices has revived inflation fears, pushing US bond yields to multi-year highs.
Gold prices are rebounding towards $4,150 on Thursday, after defending $4,100 on Wednesday.
What's still developing
- It is undertaken after QE when an economic recovery is underway and inflation starts rising.
- Despite the upward revision to its inflation projections, policymakers signalled no concerns about second-round effects, with the price shock still viewed as temporary." "The SNB slightly tweaked its currency stance, removing the reference to an "increased willingness" to intervene while retaining its commitment to act when necessary.