The European Central Bank has not yet observed second-round inflationary effects stemming from the US-Israeli military conflict with Iran, Austrian National Bank governor Martin Kocher said on Tuesday.
The central bank policymaker emphasized that while the institution is closely monitoring indirect price effects from the conflict, the broader inflationary impact remains contained for now.
Kocher’s comments provide a degree of reassurance to markets that have been pricing in potential supply-chain disruptions and energy cost spikes linked to the Middle East escalation.
The absence of second-round effects—where initial price shocks feed into wage demands and broader consumer prices—is a critical threshold for the ECB’s monetary policy stance.
If inflation remains anchored, the central bank retains flexibility to maintain its current trajectory without being forced into premature tightening.
The remarks come as diplomatic efforts to de-escalate tensions show limited progress.