The European Central Bank remains focused on achieving its 2% inflation target, Governing Council member Gabriel Makhlouf said Wednesday, declining to confirm whether this would require a rate increase at the bank's meeting next month.
Speaking to reporters in Dublin, Makhlouf stated that the ECB's objective is to deliver on the 2% inflation target and will take necessary action to achieve it. Markets have priced in expectations based on this commitment.
With the ECB's next policy meeting two weeks away, investors and economists anticipate a quarter-point rate hike. Several of Makhlouf's colleagues on the Governing Council have expressed support for this move, while others have emphasized the bank's meeting-by-meeting approach.
The Irish central bank chief aligned with the latter view, noting that the ECB will make its judgment based on all available evidence. Regarding second round effects, Makhlouf said he has not observed them, though acknowledged they may exist.
He expressed particular interest in indirect effects, including impacts on fertilizer and food prices beyond direct fuel costs. Makhlouf noted that gas prices have moved closer to baseline levels, while oil prices remain above adverse scenarios.
