• Higher energy prices bound to spread to the rest of the economy
• Policy tightening in June is all but inevitable
• Increasingly likely that Europe is facing a prolonged period of broad-based price increases

It is a slight contrast to what Villeroy said moments earlier in that the ECB needs “critical mass of data” before beginning with rate hikes. That being said, just be reminded that Villeroy will be departing from the ECB and the French central bank in early June. So, perhaps he can be more bold in his commentary.

As for Kažimír, the comments sort of echo what the rest of his peers may be leaning towards. And at this stage, markets are also doing the tightening on their behalf already. A 25 bps rate hike for June is now ~81% priced in, with ~99 bps of rate hikes factored in by year-end.

The more hawkish tilt by the ECB is already starting to produce a response and that in itself may not necessarily be a good thing for the central bank. I highlighted last week how things are going to be very tricky for policymakers in Europe considering the current set of circumstances. The post: The ECB is stuck between a rock and a hard place