Schnabel Sees Higher Rates Ahead Amid Resilient Euro-Zone Economy

European Central Bank Executive Board member Isabel Schnabel has stated that interest rates must rise further in response to a resilient economy. The prolonged conflict in the Middle East and surprisingly strong euro-zone economy pose upside risks to inflation, according to Schnabel. Consumer-price growth is likely to exceed 2% for an 'extended period' due to high energy costs, she warned.

Schnabel emphasized that acting only when this feeds into wages would leave policymakers 'behind the curve.' This indicates a concern that the current rate settings may not be sufficient to address inflationary pressures. The German official's comments suggest a hawkish stance on monetary policy, implying a desire for tighter interest rates.

It is worth noting that Schnabel's views are likely to influence ECB policymakers as they navigate the complex economic landscape. Her emphasis on the need for further rate hikes underscores the bank's commitment to price stability in the face of rising inflation risks.