Carmignac Economist Discusses ECB's Hawkish Stance Amid Economic Concerns

Carmignac economist Apolline Menut has expressed that the European Central Bank (ECB) has demonstrated a more hawkish response function. According to Jin10, Menut noted that even during communications following the Iran war, around the March meeting, the ECB had already undertaken significant work by providing a clear framework through scenario analysis. Each scenario implied a certain degree of interest rate hikes, depending on oil and gas prices. Given the latest developments in oil prices, Menut suggests that the current situation might be between the baseline and adverse scenarios. From the data, it appears that stagflation has returned, as both soft and hard data are not very optimistic.