Vujcic Cautious on Further Rate Hikes Amid Energy Price Pressures

European Central Bank (ECB) Governing Council member Vujcic stated that market bets on further rate hikes are largely driven by higher energy prices. He emphasized that when deciding the next policy move, he will look at a wider set of economic indicators rather than just relying on commodity markets.

Vujcic's comments suggest that he leans towards caution in his assessment of the current inflationary environment, indicating that higher inflation through Autumn may dampen GDP. This implies that he views the current inflation impulse as supply-driven, which would argue for a more cautious approach to monetary policy.

He also dismissed the labels 'neutral' and 'restrictive', which are common during mid-cycle policy discussions where policymakers aim to preserve optionality while maintaining a steady pace of rate hikes. The key now lies in whether other Council members adopt this framing, how energy pass-through shows up in core measures, and whether the wider indicator set cited by Vujcic begins to soften before the next decision.