Schnabel Sees Rising Yields as Inflation Cooler

European Central Bank (ECB) Governing Council member Isabel Schnabel suggests that rising global yields could help cool down inflation pressures. According to Schnabel, high costs are passed through to consumers more quickly when the economy is resilient.

Schnabel believes that a robust credit environment indicates that financial conditions are not yet restrictive. She also notes that the recent spike in global yields may lead to a stronger response from the economy than previously assumed, which would help dampen price pressures and allow inflation to return to target more gradually.