European Central Bank (ECB) Executive Board member Piero Cipollone and Governing Council member Alexander Demarco both urged caution regarding further interest rate hikes, emphasizing the need to wait for new economic projections before making additional policy decisions [1][2]. Cipollone's comments represent a notable shift following the ECB's recent rate increase earlier in June, which was implemented in response to an oil price spike driven by events in Iran [1].
Demarco echoed this sentiment, stating that the central bank can delay decisions on further tightening until the next set of projections is available [2]. He further noted that there are currently no signs of second-round impacts, unwarranted wage pressures, or de-anchored expectations, suggesting that the ECB should avoid hastening its next rate increase, especially after the recent decline in oil prices [2].
The market reacted to these cautious statements, with the EUR/USD pair trading 0.17% lower at around 1.1403 at press time [1][2]. No additional forward-looking statements or analyst opinions were provided in the sources.
CONCLUSION
ECB officials are signaling a more cautious approach to further rate hikes, preferring to wait for updated economic projections before making additional policy moves. This stance, combined with the absence of immediate inflationary pressures, has led to a modest decline in the euro. The market is likely to remain attentive to upcoming ECB projections and policy signals.