European Central Bank Vice President De Guindos: we need to be cautious and remain calm on interest rate issues

European Central Bank Vice President Luis de Guindos said that the uncertainty of the Iran war means that the central bank should set interest rates with caution. "In a highly uncertain environment, we need to analyze data carefully and calmly," he said in Madrid on Tuesday, stating that monetary policy is not all-powerful and cannot prevent the initial impact on prices. "But we can prevent second-round effects and anchor inflation expectations." "We do not know what will happen tomorrow or the day after," Guindos said. "The Strait of Hormuz is sometimes closed, sometimes open, sometimes closed again. They are negotiating, and this will be a key factor. It will determine the direction of inflation and expectations." He emphasized that the economic impact of the Middle East conflict is huge.