TREE NEWS reports: European Central Bank Governing Council member Boris Zigman said eurozone economic growth faces risks if inflation is not resolved, adding that market bets on the central bank’s rate path will not set the direction of future ECB action. He said no significant second-round effects have been observed and noted considerable optimism about the growth outlook.
ECB’s Zigman: Eurozone Growth at Risk If Inflation Not Resolved
The pushback on market pricing is the notable part: a Governing Council member explicitly decoupling policy direction from rate-path bets, while simultaneously flagging growth risk if inflation persists and seeing no significant second-round effects. That combination leaves the ECB's reaction function genuinely ambiguous — vigilance on inflation without the wage-spiral evidence that would normally justify tightening. The open question is whether this framing reflects a broader Council view or a minority position, and whether the optimism on growth he cites survives contact with the inflation data.
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