European Central Bank Governing Council member: Even if a US-Iran peace agreement is reached, it will not weaken the case for rate hikes

Odaily reported on June 3rd that European Central Bank Governing Council member Wunsch stated that a US-Iran peace agreement reached before the ECB meeting next week will not weaken the rationale for raising interest rates. Wunsch said: "If a peace agreement is indeed reached on the eve of the meeting, this will become part of the discussion. But we cannot know whether it will be durable or credible." He hinted at supporting a 25 basis point rate hike by the ECB. He believes that if the conflict remains unresolved, the discussion among policymakers before setting interest rates on June 11th "will be fairly easy." If a US-Iran peace agreement is reached, the discussion "might be slightly less easy. But the rationale for a rate hike could still exist, just not as strong." He stated: "At some point, we cannot let the markets bear everything. We need to take a stance." (FT)