FRANKFURT, June 2 (Reuters) – The following are key quotes from European Central Bank policymakers in the run-up to the June 11 policy meeting.
Financial markets have fully priced in a rate hike by July at the latest, while economists polled by Reuters see a move in June.
ISABEL SCHNABEL, ECB BOARD MEMBER, MAY 26
“Given the size and the persistence of the current shock, looking through is no longer an option in my view.
“Even if the war ended today, a lot of damage has already been done to energy infrastructure and global supply chains. So, even then, I believe that a monetary policy reaction would be needed.
“From today’s perspective, I think a rate hike in June will be needed.”
PHILIP LANE, ECB CHIEF ECONOMIST, MAY 26
“We are likely to make a further upward adjustment to the inflation forecast in June.”
“We do expect indirect effects beyond energy prices. Our surveys suggest many firms expect that they will have to raise prices. If this develops from an energy shock into a broader inflation problem, that would be a major issue.”
FABIO PANETTA, ITALIAN CENTRAL BANK GOVERNOR, MAY 29
“The forward-looking picture seems to call for a recalibration of the monetary policy stance to counter the risk of persistent inflationary tensions.
“Even in the event of a rapid resolution of the conflict, a swift normalization of oil and gas prices seems unlikely.
YANNIS STOURNARAS, GREEK CENTRAL BANK GOVERNOR, MAY 25
“In the event of a significant but temporary overshooting of the inflation target, the response should be balanced; a cautious adjustment of monetary policy in a more restrictive direction, capable of limiting the intensity of second-round effects, without, however, harming economic activity disproportionately.”
ÁLVARO SANTO PEREIRA, PORTUGUESE CENTRAL BANK CHIEF, MAY 31
“Our concern right now is inflation; we need to look at the data very closely. But I also think, looking at what happened in the past, that we need to act sooner rather than later, to avoid a greater second-round impact.
“When there is an inflationary spiral, I prefer that we act swiftly and decisively.”
OLLI REHN, FINNISH CENTRAL BANK CHIEF, MAY 21
“From the standpoint of medium-term orientation, the critical thing is whether we see evident signs of second-round effects, and/or de-anchoring of inflation expectations.”
“If you look at those two things, we see some vibration in the short-term inflation expectations, but no significant deviation in medium- to long-term inflation expectations.”
MARTIN KOCHER, AUSTRIAN CENTRAL BANK GOVERNOR, MAY 11
“If the situation does not improve significantly, there will be no avoiding an interest rate move in the near future.”
PETER KAZIMIR, SLOVAK CENTRAL BANK GOVERNOR, MAY 4
“We are not committed to any fixed path, but we remain firm in our approach. On this basis, policy tightening in June is all but inevitable.”
“It has been a part of our baseline since March and the events have, sadly, not surprised us in a positive way.”
(Reporting by Balazs Koranyi; Editing by Andrew Heavens)
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