ECB's Makhlouf: Iran Deal Won't Quickly Lower Inflation

Gabriel Makhlouf, a member of the European Central Bank (ECB) Governing Council, expressed skepticism that the peace agreement between the US and Iran would rapidly change euro zone inflation. Makhlouf stated that the deal would not immediately ease price pressures. Emphasizing that persistent price pressures continue, Makhlouf indicated that the impact of geopolitical developments on inflation would be limited. The ECB official argued that even a potential decline in energy costs would not fundamentally alter the overall inflation outlook. Commenting on the ECB's monetary policy stance, Makhlouf said the central bank should continue to take cautious steps in fighting inflation. He suggested that expectations of interest rate cuts might be premature under current economic conditions. Makhlouf's remarks reinforced market expectations that the ECB will not ease policy in the near term. It is estimated that it will take time for inflation in the euro zone to return to target levels. This is not investment advice.