Key facts
- ECB Vice President Luis de Guindos stated a global supply shock will affect inflation before growth.
- De Guindos warned that a possible June rate hike might not be followed by another move.
- He described the supply shock as affecting goods beyond energy, worsening terms of trade.
- The shock is expected to significantly temper economic growth through consumption and investment.
- The ECB will consider new macroeconomic projections and information on the Middle East conflict for its June 11 meeting.
Central banks globally are grappling with persistent inflation and the potential economic impact of geopolitical events. Statements from high-ranking officials like ECB Vice President Luis de Guindos offer insights into the complex decision-making process regarding interest rates, balancing inflation concerns with risks to economic growth. The ongoing Middle East conflict adds a layer of uncertainty, particularly regarding energy prices and supply chains.