ECB’s Makhlouf Sees Lingering Price Pressures Despite Iran Deal

European Central Bank (ECB) Governing Council member Gabriel Makhlouf stated this week that a peace deal between the United States and Iran would not rapidly alter the course of euro-area inflation. Makhlouf indicated that underlying price pressures remain persistent, suggesting that the impact of such a geopolitical development on inflation would be gradual rather than immediate. He emphasized that the ECB's monetary policy decisions would continue to be guided by the overall inflation outlook and the persistence of domestic price pressures, rather than solely by external factors like a potential de-escalation in the Middle East. The ECB has been closely monitoring inflation trends, which have shown signs of moderating but still exhibit some stickiness in certain sectors. Makhlouf's comments signal a cautious approach, prioritizing the ECB's mandate of price stability over short-term geopolitical shifts. The Governing Council will likely maintain its data-dependent strategy, assessing a range of economic indicators before making further policy adjustments.