ECB Officials Express Concerns Over Inflation and Productivity

During her scheduled appearance on Thursday, European Central Bank (ECB) executive board member Isabel Schnabel highlighted services inflation as the “biggest concern.” She emphasized the emergence of a consensus indicating potential challenges ahead, characterizing the upcoming period as potentially “quite bumpy.

Schnabel also expressed apprehension regarding productivity growth, noting a trend of negative productivity growth over several quarters.

Echoing Schnabel’s sentiments, ECB Policymaker Madis Muller conveyed hesitance towards initiating consecutive rate cuts, indicating a cautious approach to monetary policy adjustments.

Market Reaction

Despite the remarks from ECB officials, the EUR/USD pair remained relatively unaffected, holding steady near 1.0725. The pair exhibited a modest increase of 0.25% on the day, indicating resilience to the concerns expressed regarding inflation and productivity.

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