--- title: "European Central Bank Governing Council member Wunsch clearly stated: If the Iran conflict drags on until June, interest rate hikes are inevitable" type: "News" locale: "en" url: "https://longbridge.com/en/news/280801128.md" description: "European Central Bank Governing Council member Pierre Wunsch stated that if the conflict in Iran does not end before June, the European Central Bank may need to take interest rate hike measures. He urged the market to remain patient in assessing the impact of the conflict on the economy. Wunsch pointed out that if the conflict continues, a policy response will be necessary, and he indicated that two interest rate hikes expected by the market are \"acceptable.\" Some officials have hinted that if the price outlook worsens, a rate hike may occur next month. Wunsch believes that an interest rate hike in April is not impossible, but more evidence needs to be observed" datetime: "2026-03-27T13:33:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/280801128.md) - [en](https://longbridge.com/en/news/280801128.md) - [zh-HK](https://longbridge.com/zh-HK/news/280801128.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280801128.md) | [繁體中文](https://longbridge.com/zh-HK/news/280801128.md) # European Central Bank Governing Council member Wunsch clearly stated: If the Iran conflict drags on until June, interest rate hikes are inevitable According to the Zhitong Finance APP, Pierre Wunsch, a member of the European Central Bank's Governing Council, stated that if the conflict in Iran is not resolved by June, the European Central Bank may have to take action. He also urged the market to remain patient so that officials can fully assess the impact of this conflict on the economy. The Belgian central bank governor pointed out in an interview that while policymakers are prepared to tighten monetary policy, they will not rush to implement measures that could be seen as an overreaction. Wunsch stated on Friday, "If the conflict continues until June without resolution, the actual situation is likely to exceed our baseline expectations, and at that point, some policy response will be necessary." He expressed that the market's expectations of at least two rate hikes this year are "acceptable." Currently, European Central Bank officials are weighing whether to raise borrowing costs to prevent soaring energy prices from evolving into broader inflationary pressures. ECB President Christine Lagarde stated this week that the central bank will act decisively and swiftly if necessary, but is still closely monitoring the dynamic effects of the conflict. Some officials, represented by German central bank President Joachim Nagel, have signaled that if the price outlook deteriorates further, a rate hike may be needed as early as next month. Meanwhile, officials like Finland's Olli Rehn have called for caution, believing that the medium-term effects remain unclear. Wunsch noted that a slowdown in economic expansion may ultimately suppress the second-round transmission effects of inflation. However, he also believes that a rate hike next month is not out of the question. Wunsch stated, "An April rate hike is not impossible. If by April we have solid evidence that this shock will be persistent and lead to sustained high inflation, then we may have to take action. However, we still have time to observe before the April meeting." The ECB's baseline scenario forecast released last week predicts that consumer price growth will reach 2.6% this year, significantly above the 2% target level. However, Slovenia's central bank governor Primoz Dolenc stated on another occasion that even this expectation is "no longer realistic." In an interview, he said, "The tensions between the U.S. president and Iran have not eased; rather, they are escalating, which could mean a prolonged conflict with long-term impacts." In the extreme scenario envisioned by the ECB, if energy supply disruptions persist, inflation could even reach 6.3%. However, Wunsch believes that if inflation and economic growth are close to baseline expectations, it remains unclear whether policymakers must take action. He stated, "If the situation evolves into what we call an adverse scenario—where inflation rises and is more persistent in severe cases—then I believe we will have to take action. But even so, we still need to distinguish whether to act to maintain stable real interest rates or to respond through rate hikes." ## Related News & Research - [Trump threatens to hit Iran 'extremely hard' over next two to three weeks](https://longbridge.com/en/news/281445712.md) - [$100 Invested In ProShares Ultra Silver 10 Years Ago Would Be Worth This Much Today](https://longbridge.com/en/news/281548227.md) - [Iridium Communications Stock (IRDM) Moonshots 12% on SpaceX IPO Filing and Amazon Takeover Rumors](https://longbridge.com/en/news/281548482.md) - [Micron Sell-off Is a "Buying Opportunity" Says Mizuho](https://longbridge.com/en/news/281560003.md) - [Every Major Hyperscaler Is Moving To Arm — Here's Why It Matters](https://longbridge.com/en/news/281502285.md)