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European Central Bank (ECB) Executive Board member Isabel Schnabel emphasized on Thursday that the recent Middle East ceasefire does not justify pausing further rate hikes. In an interview with Die Zeit, Schnabel warned that inflation remains a pressing concern, and the ECB must remain vigilant to avoid undermining its credibility. She stated that the central bank’s primary focus is on achieving a durable disinflation path, even as geopolitical tensions ease. Market analysts note that this hawkish stance could delay ECB rate cuts, which have been priced into EUR/USD futures for months. Traders are now recalibrating their expectations, with the euro showing resilience against the dollar. The ECB’s policy trajectory will be critical for the broader eurozone economy, particularly as energy prices stabilize and growth remains fragile. Investors should monitor upcoming inflation data and ECB speeches for further clues on the timing of rate decisions.
