European Central Bank Governing Council member Kockl: Iran war pushes up prices, European Central Bank faces pressure to raise interest rates

European Central Bank Governor Kocherlakota said that unless the United States and Iran can reach a sustainable peace agreement, the European Central Bank will face an interest rate hike next month. Inflation levels in the eurozone this year may be higher than previously expected, and countries are still dealing with previous price shocks. At the same time, the economy has shown considerable resilience. "There are always low probability scenarios that could lead to different assessments of the situation, but currently, all signs indicate that we will make decisions between maintaining interest rates and raising them," Kocherlakota said. "And it is clear to me that if the situation does not improve, we will have to focus on taking action." He also said that it is not appropriate to make any commitments at the moment, as it would be meaningless to do so. Uncertainty is high, so we should not exclude too many options too early. Of course, there is hope for positive progress.