Schnabel warned that even if a U.S.-Iran peace deal reopens the Strait of
Hormuz, price pressures could be stronger than expected. She said food, goods
and services inflation face upside risks and an energy-price shock could spill
over more broadly. While welcoming recent energy-price declines tied to peace
prospects, she cautioned against complacency, saying uncertainty remains high
even as an announced deal reduces the probability of a worst-case scenario, and
that oil is likely to stay elevated as the strait reopens only gradually. Seen
as the Governing Council’s most hawkish member, Schnabel reiterated she expects
the ECB to raise rates further to bring inflation back to 2% in the medium term;
consumer inflation expectations have risen but there are not yet signs of wage
pressures.
