ECB's Kazimir: Ready to Hike Again If Necessary, October Meeting Under Consideration
nashnova research
ECB Governing Council member Peter Kažimír said the bank "won't hesitate" to hike again if evidence warrants; Lithuania's Gediminas Šimkus added that October is early enough to assess the inflation outlook — markets now price in up to three more hikes within a year as natural-gas prices hit a four-year high.
What exactly did Kažimír say?
Slovakia's central-bank governor wrote in a blog post: "We will not waver when evidence supports action."
He stressed that "an open mind does not mean hesitation." This means → the ECB's hawkish wing is actively laying the ground for the next hike, not merely "keeping options open."
His core judgment: inflation risks are "clearly tilted to the upside." The question is whether demand and labor markets are strong enough to trigger "second-round effects" — the spiral where rising prices push up wages, which push prices higher still.
Why is energy the pivotal variable?
Kažimír's focus is shifting from oil to natural gas and electricity. In plain terms = the costs that hit European household heating bills and factory power charges hardest are gas prices, not crude.
Natural gas is at a four-year high. European countries delayed restocking over the summer, betting on a post-Iran-conflict price drop. Storage levels are now well below historical norms.
This means → governments are scrambling to refill reserves, bidding prices up further. If stocks don't normalize before winter, heating and power costs will keep climbing — and feed through into broader inflation.
What risk does food inflation add?
European drought, El Niño weather patterns, and surging fertilizer prices form a triple overlay expected to push food costs higher in coming months.
Kažimír's logic chain: longer energy stays elevated → greater risk it embeds in long-term expectations and wages → food costs rise in tandem → inflation becomes harder to bring down.
This reflects a fear that energy is no longer a one-off shock but a cost now hardening into the economic structure.
Why does Šimkus's statement matter?
Lithuania's central-bank governor told reporters in Vilnius: "As early as October, we can assess whether the inflation outlook is deteriorating or improving."
He declined to rule out any specific meeting for a rate move. In plain terms = the October 29 policy meeting is a live decision window, not a placeholder.
This means → two Governing Council members spoke on the same day with a consistent signal: internal consensus around "act sooner rather than later" is building.
How are markets pricing this?
The ECB raised its key rate by 25 basis points to 2.5% last week — the second hike since the Iran war began — and revised several inflation forecasts upward.
Traders now price in three more hikes by October 2027.
The key checkpoint: whether natural-gas storage can return to normal levels before the October 29 meeting. If it cannot, rate-hike expectations will most likely strengthen further.
市场有风险，内容仅供研究参考，不构成投资建议。