economy
ECB 'will do what is necessary' to tame inflation, Bank of France governor tells CNBC
Markets are overwhelmingly pricing in a rate hike from the central bank at its next meeting.
TL;DR
- ECB policymaker Francois Villeroy de Galhau stated the bank will "do what is necessary" to keep inflation at 2% in the medium term.
- Spiking oil prices due to the Middle East conflict have fueled concerns about a resurgence of inflation.
- Eurozone inflation jumped to 3% in April, up from 2.6% in March.
- The ECB is vigilant about potential "second-round effects" of inflation, which include wage growth and inflation expectations.
- Markets are largely pricing in a rate hike from the ECB at its June meeting.
- ECB President Christine Lagarde previously indicated readiness to hike rates if inflation overshoots the target.
- Other central bankers, including Joachim Nagel and Martins Kazaks, have also commented on the challenging economic outlook and inflation risks.