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ECB Must Be ‘Vigilant’ Without Rushing Rate Hikes, Muller Says

Mark Schroers, Jana Randow
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ECB Governing Council member Madis Muller warned the bank must remain vigilant about inflation risks stemming from the Iran conflict, though he cautioned against hasty interest rate hikes. Muller, Estonia’s central bank chief, noted no second-round inflation effects have emerged yet but stressed the danger of assuming energy shocks will be short-lived or ignorable. While the ECB is better prepared than during 2022’s crisis, Muller emphasized the need to avoid complacency amid geopolitical tensions disrupting energy markets. He urged a balanced approach, acknowledging current stability but warning that premature policy moves could destabilize economic recovery efforts. The remarks reflect broader ECB caution as policymakers weigh inflation pressures against growth risks in a fragile post-war economic landscape.
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Madis MullerThe European Central Bank needs to stay “vigilant“ to potential inflation risks from the Iran war but mustn’t act in haste, Governing Council member Madis Muller said.While there are no signs of broader second-round price effects so far and the ECB is better placed than in 2022, it would be “dangerous” to assume an energy shock will be temporary and can be completely looked through, the Estonian central-bank chief said.

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