ECB's Panetta Sees Inflation Above 3% Until 2027, Warns of Risk Underestimation
ECB board member Panetta says eurozone inflation is around 3% and likely to stay above that level through early 2027. He warns that equity market rallies post-Iran conflict reflect underestimation of risks from energy prices, tight financial conditions, and geopolitical uncertainty.
European Central Bank board member Fabio Panetta stated that eurozone inflation is currently hovering around 3% and is projected to remain above that level until early 2027. He emphasized that the ECB's interest rate decisions are aimed at keeping inflation expectations firmly anchored, limiting indirect and second-round effects of shocks.
Panetta also noted that several indicators suggest the recent rise in equity markets following the Iran conflict is due to an underestimation of risks. He added that risks linked to higher energy prices, tighter financial conditions, and persistent geopolitical uncertainty appear to be only partially incorporated into market evaluations.
Source: First Squawk