ECB board member Stournaras said the bank must remain vigilant to upside down
inflation risks but should not act hastily. He sees no second-round, wage-driven
inflation effects yet but cautioned that could change amid persistent supply
shocks and stronger demand from fiscal expansion and AI investment. With just
over a month until the next policy decision he has not decided and will look to
ECB staff projections. If September brings an inflation spike or a rise in
energy costs that move the outlook into an adverse scenario, an October rate
hike cannot be ruled out; conversely, doubts would argue for waiting for the
next projections. He added that this week’s Fed rate increase bolsters Fed and
global monetary policy credibility and also helps the ECB.
