ECB’s Demarco: Higher Core Inflation Could Support Rate Action

The signal here is less about any single data point than about which variable the ECB is willing to act on. By naming core inflation specifically, Demarco shifts the burden of proof onto underlying price pressures rather than headline energy or food swings, which matters for how markets read upcoming prints. The open question is whether this framing is shared across the Governing Council or remains a minority view, since that determines how much weight a core reading actually carries.