European Central Bank officials say it is necessary to stabilize inflation expectations. It is still too early to discuss potential interest rate hikes.

European Central Bank Managing Committee member Francois Villeroy de Galhau told media La Stampa that the bank is prepared to take action to curb inflation expectations, but it is still too early to predict a potential interest rate hike date. Villeroy, who also serves as the Governor of the Bank of France, stated that the Iran war could cause negative supply shocks, leading to a slowdown in economic growth and faster rise in consumer prices, and the latest news on this conflict "has not brought any favorable signals." In an interview published on Monday, he said, "The European Central Bank cannot control oil prices, but it has the ability and obligation to anchor the inflation expectations of households and businesses at the 2% medium-term target. If necessary, we are prepared to take action in this direction." Some of Villeroy's colleagues have previously hinted that the central bank could take action as early as April.