Madis Muller, a member of the ECB Governing Council, stated inflation is expected to accelerate in the coming months. This aligns with the ECB’s revised 2026 inflation forecasts, driven by rising energy prices from the ongoing Middle East conflict involving Iran, Israel, and the US.
The ECB recently held the deposit rate steady at 2% while raising its 2026 headline inflation projection from 1.9% to 2.6%. Eurozone inflation stood at 1.9% in February, but consumer expectations surged to 4.0% in March. The ECB has signaled further rate increases if energy price shocks persist.
Market pricing currently shows a 100% probability of no rate cut at the April 2026 meeting, consistent with Muller’s hawkish outlook. Traders see any significant near-term easing as unlikely.