European Central Bank (ECB) governing council member and Governor of the Central Bank of Ireland, Gabriel Makhlouf, said in his blog ⁠on the Irish central bank’s website on Friday that he will be vigilant to the indirect effects of higher energy prices on production, ​transportation, and services, Reuters report.

Remarks

I will be paying close ​attention to indirect effects, that is how higher energy prices are contributing ​to cost-push inflation in production, ​transportation, and services.

Potential second-round effects via wages will take longer ​to show up, given ​the ⁠staggered nature of wage-setting in Europe. In the meantime, inflation ⁠expectations ​need to be ​closely monitored for signs of de-anchoring.

Market reaction

There seems to be no impact of ECB Makhlouf’s comments on the Euro (EUR). As of writing, EUR/USD trades 0.2% higher to near 1.1755 due to weakness in the US Dollar (USD).

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