[ECB Governing Council Member: Rate Hike Still Needed in June Even if Iran Reaches Peace Agreement] BlockBeats News, May 26, according to Reuters, European Central Bank (ECB) Governing Council member and potential candidate for ECB President Isabel Schnabel stated that even if peace talks between the U.S. and Iran yield results, the ECB should still proceed with a rate hike in June. She noted that the current energy shock has lasted far longer than expected, with damage to energy infrastructure and supply chain disruptions driving high energy prices into broader economic sectors. Schnabel pointed out that inflation in the Eurozone has risen to 3% and still faces upward risks. Within the ECB, there are concerns that high energy costs are pushing up the prices of goods and services through "second-round effects," creating more persistent inflationary pressures. She emphasized that the ECB's previous baseline forecast already included two rate hikes, and a single action may not be sufficient to achieve the inflation control target. The market has largely priced in expectations of two future ECB deposit rate hikes and estimates about a 50% probability of a third hike within the next year. However, the ECB will not pre-commit to a subsequent path and will continue to adjust policies dynamically based on data from each meeting. At the same time, Schnabel warned that persistently high energy prices could also lead to weaker-than-expected economic growth in the Eurozone, creating simultaneous pressures of slowing growth and rising inflation. [Original Link]