Euro zone inflation risks remain high, Nagel says

Euro zone inflation reached 3.8%, nearly double the European Central Bank’s 2% target, and risks remain tilted upward, Bundesbank President Joachim Nagel said Monday. He said there were no clear signs that higher inflation had spread to wage and price setting, while longer-term expectations remained consistent with the target.

Nagel warned that energy and food costs could rise further, citing low gas storage, damage to refining capacity, drought, wildfires and fertilizer shortages. Markets expect the ECB to raise its 2.5% deposit rate two or three more times over the coming year, but Nagel said decisions should depend on incoming data.

Read the full story at wsau.com.