European Central Bank (ECB) Executive Board member Isabel Schnabel said on Wednesday that from the present perspective, further interest rate hikes are needed to bring inflation back to the central bank’s 2% target.

Key takeaways:

From today’s view, more hiking is needed to get to 2%.

The ceasefire is not a signal for the ECB to ease vigilance.

ECB rates are not restrictive yet.

War, inflation, and growth will set the timing and size of any future hikes.

The economy is showing relative resilience.”

Schnabel flags more hikes as Euro resilience keeps ECB on front foot

The FXS Speech Tracker score of 8.6 versus a historic 7.1 marks a clear hawkish shift in Schnabel’s tone, underscored by the view that “more hiking is needed” and that current ECB rates are “not restrictive yet.” The insistence that a ceasefire would not reduce vigilance, combined with an emphasis on persistent inflation risks, supports expectations for additional tightening and is Euro-supportive on balance.

By stressing that war, inflation, and growth will shape the timing and size of any hikes, Schnabel keeps the door open to a longer and potentially higher-rate path than previously priced. The reference to the economy’s “relative resilience” further justifies scope for more rate increases, reinforcing a hawkish bias that can underpin Euro dips and limit downside in the near term.