Bundesbank president and ECB Governing Council member Nagel told German public
radio that even if the Iran conflict ends quickly, prices could stay elevated
for an extended period. He said supply chains have clearly changed and risk
premia — notably a premium for shipping through the Strait of Hormuz — could
rise, adding he doubts the economy will return to pre-conflict data levels.
Nagel warned global uncertainty and structural shifts may persist beyond the
regional conflict, that near-term rate rises will raise refinancing costs, and
that maintaining price stability is the central bank’s most important
contribution to long-term economic health.
