President of the Bundesbank: The situation in the Middle East is of concern and the possibility of the European Central Bank raising interest rates again cannot be ruled out
Joachim Nagel, a member of the Governing Council of the European Central Bank and President of the Bundesbank, expressed concern about the development of the situation in the Middle East and reiterated that the European Central Bank may still need to raise interest rates again. Nagel said in the Slovenian capital Ljubljana on Wednesday that he was optimistic on Monday as oil prices fell back to pre-conflict levels, the German cabinet approved a pension reform package and industrial data improved. "But I think some of you have watched the news this morning," Nagel said, "and now I think we're back to square one. I still wish things were different, but the latest news is that peace talks have stalled and Trump has announced that he will stop trade with Spain. Yeah, that's weird. And energy prices are up again." His remarks came just hours after U.S. President Donald Trump warned that the ceasefire with Iran may be over. Previously, the United States launched a new round of air strikes against Iran and revoked the exemption arrangement that allowed Iran to sell oil. International crude oil prices soared accordingly, with London Brent crude oil futures prices rising more than 6% to more than $79 per barrel. However, this level is still well below the high of more than $126 a barrel in late April. Policymakers were generally in no rush to take action again as hostilities in the Middle East eased during the European Central Bank's annual forum in Portugal last week, but there was no consensus on the next policy direction. Nagel said on Wednesday: "I don't know what the central bank will decide at the July meeting. Is it possible to raise interest rates further? It is possible. Is it possible to keep interest rates unchanged? It is also possible, or we may take other measures."