ECB Member Stournaras Issues Warning on Inflation and Interest Rates
European Central Bank official Yannis Stournaras emphasized the need to remain vigilant against inflation risks while urging no rush in interest rate moves.
European Central Bank Governing Council Member and Bank of Greece Governor Yannis Stournaras, in remarks at a meeting in Dublin, called for caution against upside risks to inflation and urged that hasty steps be avoided.
Call for Vigilance Against Inflation Risks
European Central Bank Governing Council Member Yannis Stournaras stated that caution is necessary regarding upside risks to inflation, but action should not be taken in a hasty manner.
Second-Round Effects Not Yet Seen
The Governor of the Bank of Greece noted that it is good news that second-round effects through channels such as wages have not yet been observed, but added that this cannot be assumed to be permanent.
Supply Shocks and Strong Demand Factor
Making assessments in Dublin, Stournaras stated that an ongoing series of supply-side shocks has been observed and that there is a strong demand element driven by fiscal expansion and the boom in artificial intelligence investments.
Economic Projections Awaited for Interest Rate Decision
With more than a month remaining until the next interest rate decision, Stournaras indicated that he has not yet made a final decision and that various economic forecasts prepared by the ECB will serve as a guide.
Possible Scenarios and Outlook for October
Stournaras stated that if a jump in inflation occurs in September or if an increase in energy costs triggers an adverse scenario, an interest rate hike in October cannot be ruled out.
No Need to Rush into Action
The Bank of Greece Governor emphasized that in the event of even the slightest doubt, nothing should be done and they would wait until the next round of forecasts, noting there is no need to rush into action.