Key insights
- ECB's Lane highlights company pricing expectations and new hire wages as key inflation indicators. Markets anticipate a price-level jump due to energy costs, but not sustained inflation above 2%. This suggests a slightly hawkish ECB stance, potentially leading to tighter monetary policy, which could negatively impact US equities, but the effect is limited due to the focus on the Eurozone.
FRANKFURT, March 25 (Reuters) - The European Central Bank’s chief economist Philip Lane on Wednesday flagged companies’ price-hike expectations and wages for new hires as some of the key indicators that the ECB will monitor amid fears of a war-fuelled spike in inflation.
In his presentation at a conference in Frankfurt, Lane also noted that financial markets had priced in a "price-level jump" in the euro zone as a result of higher energy prices, rather than a persistent rise in inflation above the ECB’s 2% target.