ECB’s Schnabel: Central bank will hike rates but depending on incoming data

European Central Bank (ECB) Governing Council member Isabel Schnabel made some comments on monetary policy normalization over the weekend, per Reuters.

Key quotes

"We will hike interest rates sometime after, as appropriate, in light of incoming data."

"The speed of normalization ... will depend on the economic fallout from the war, the severity of the inflation shock and its persistence.”

“Inflation risk was skewed towards even higher readings given sharply rising producer prices, structural economic changes like de-globalization and likely wage hikes.”

Market reaction

EUR/USD is on the defensive at around 1.1050, licking its wounds after Friday’s slump to near 1.1030. The US dollar index holds onto its recent gains amid a cautious start to the Fed minutes week.