European Central Bank Governing Council member Pierre Wunsch pushed back on the idea that a potential US-Iran peace agreement could derail the central bank's rate hike plans ahead of its June 11 decision. In remarks reported by Jinshi on June 3, Wunsch said that even if a deal were struck on the eve of the meeting, "the case for a hike probably still exists, just less strong."
Wunsch noted that if the geopolitical conflict remains unresolved, the policymakers' discussion would be "quite easy." In the event of a peace deal, the debate might become "slightly less easy," but the underlying rationale to tighten monetary policy would remain. He indicated personal support for a 25-basis-point increase.
"At some point, we cannot let the market bear everything. We need to take a stance," Wunsch said, signaling a resolve within the ECB to prioritize inflation control even amid fluid geopolitical developments.