Schnabel Warns Inflation May Persist Above 2% Amid Ongoing Economic Uncertainty

European Central Bank (ECB) Executive Board member Isabel Schnabel expressed concerns that inflation may remain above 2% for an extended period. In a recent speech, she stated that further tightening would be necessary to prevent second-round effects and keep inflation under control.

Schnabel emphasized the importance of monitoring incoming data to determine the extent of tightening needed. She also highlighted the 'particularly concerning' natural gas situation, which is likely to continue affecting prices.

The ECB's primary mandate is to maintain price stability, and Schnabel reiterated that goal in her speech. However, she acknowledged that the economy appears to be gaining further momentum, which may require adjustments to monetary policy.