Wunsch: Rates May Need To Hit 4%, Core Inflation Key

BBG has covered comments made by ECB Governing Council Member Pierre Wunsch, who suggested that a peak benchmark interest rate of 4% (in line with market pricing) may be required if inflationary impulses remain elevated.

• Wunsch pointed to “the evolution of core inflation” as the key driver re: the ECB’s terminal rate.
• He went on to stress that “If we don’t get clear signals that core inflation is going down, we will have to do more,” which means that “looking at rates of 4% would not be excluded,”
• Still, he was cautious when it came to any guidance, flagging a need for a data-driven mindset focused on core inflation dynamics.