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IPC Index — Mexico MarketECB’s Makhlouf: Will pay attention to indirect effects of higher energy prices
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).
