ECB’s Makhlouf:
Policy rate will need to be kept at a restrictive level to dampen demand
Short-term volatility in financial markets does not translate into risks for the macroeconomic outlook
Must remain steadfast and ready to act as required to ensure we reach our target over the medium-term
Must remain alert to the longer lags in the transmission of monetary policy to growth and inflation
If we end up in a wage-price spiral, it would call for stronger monetary response but so far there has been no indication that expectations have become de-anchored
The market is pricing in about 50 bps more of hiking from the ECB, up to 3.50%.