ECB's Schnabel: Energy Shock More Persistent, Inflation to 4%, Rate Hikes Priced

ECB's Isabel Schnabel warns the energy shock from the Iran-US war is more persistent than expected and spreading beyond oil. With a resilient economy, analysts project inflation up to 4% this year, and markets price in four 25bp rate hikes by end-2027. This marks a shift from earlier expectations of a short-term event, signaling sustained inflationary pressure and tighter monetary policy.