ECB Faces Pressure to Hike Rates Amid Soaring Eurozone Inflation

Germany's 10-year Bund yield has stabilized above 3.6% for the first time since June 2009, prompting concern about the European Central Bank's (ECB) next move.

ECB President Christine Lagarde recently stated that the recent inflation surge has yet to generate significant second-round effects across the euro area, suggesting a measured policy response remains appropriate.

The current inflation rate in the eurozone is already above 3% and could reach 4% by year-end, leading markets to price in up to four additional interest rate hikes over the next year, following two increases over the summer.

Economists expect the ECB to hold rates at its October 29 meeting but resume tightening in December, when new economic projections are due.