BlockBeats News, May 26th, according to Reuters, Isabel Schnabel, a member of the ECB's Executive Board and seen as a potential candidate for ECB President, stated that even if the U.S. achieves a peaceful negotiation with Iran, the ECB should still start raising interest rates in June. She believes that the current energy shock has lasted much longer than expected, with damage to energy infrastructure and supply chain disruptions driving high energy prices into a broader economic transmission.

Schnabel pointed out that Eurozone inflation has risen to 3%, with further upside risks. There are internal concerns within the ECB that high energy costs are pushing up prices of goods and services through a "second-round effect," creating more stubborn inflationary pressures. She emphasized that the ECB's previous baseline projections already included two rate hikes, and a single move may not be sufficient to achieve the inflation control target.

The market has already priced in expectations for two future increases in the ECB's deposit rate and anticipates a 50% probability of a third rate hike in the coming year. However, the ECB will not commit to a predetermined path in advance and will continue to dynamically adjust policies based on data at each meeting. At the same time, Schnabel warned that sustained high energy prices could also weaken Eurozone economic growth more than expected, creating pressure from both slowing growth and rising inflation.