ECB Stays Data-Dependent Amid Geopolitical Risks and Inflation Pressures

European Central Bank (ECB) Governing Council member Martin Kocher emphasized that the ECB's policies will remain data-dependent in the coming months. Speaking on Friday, Kocher noted that recent geopolitical developments have led to a quick change in energy prices and, consequently, the inflation outlook.

Kocher stated that the ECB governing council will make decisions based on incoming data in autumn to bring Euro area inflation back to its target level of 2% on a sustainable basis. He acknowledged that the current situation poses upside inflation risks due to the impact of geopolitical shocks on energy prices.

Despite this, Kocher's comments were seen as mildly cautious rather than strongly hawkish, with FXS Speechtracker assigning his remarks a lower score compared to past statements. The ECB's stance is data-dependent and wait-and-see, tempering expectations for aggressive policy moves in the near term.