ECB Signals Second-Round Inflation Effects Taking Hold; Rate Hike Likely in July

According to Jin10, ECB President Christine Lagarde said the central bank has begun seeing second-round effects of inflation in recent weeks, as high energy prices transmit to other sectors of the economy. The ECB raised rates last week for the first time since 2023 due to Middle East tensions adding to price pressures. Policymakers, including Bundesbank Chief Nagel, do not rule out a second rate hike at July's meeting, suggesting price pressures may persist even if regional conflict ends quickly. Lagarde defended the move, stating that controlling inflation is essential to avoid long-term damage to consumers and businesses.
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