ECB governing council member REHN said on Tuesday that rapid euro area energy
price rises have not yet spread to other goods and services, and that recent
increases in bond yields may weigh on growth and thus restrain price pressures.
He said euro area inflation remains clearly above the ECB's 2% target, and
policymakers are discussing how much further to raise rates beyond two hikes
this summer. Rehn added that while several policymakers see inflation risks to
the upside, offsetting forces are at work: "Rising long-term rates are slowing
growth and reducing the pass-through of energy prices into other prices and
wages." He said this echoed parts of remarks by ECB chief economist LANE.
