ECB executive board member Rehn said energy prices are approaching the adverse
scenario the ECB models, but sharply higher long-term borrowing costs are
limiting how much this bout of inflation can pass through to the broader
economy. Eurozone inflation is about twice the ECB target, keeping pressure on
the bank to consider further hikes. Rehn said inflation risks remain skewed to
the upside but are two-sided and that growth and inflation forecasts carry very
high, broad uncertainty. He also warned that lending to technology firms could
pose financial-stability risks, saying large valuation corrections tied to AI
could propagate through equity and credit markets.
