ECB senior official Schnabel warns risk markets underestimate inflation

The central bank has all but promised another half-point step in March in an effort to curb inflation

Questioned if economists and investors are justified in assuming the ECB will halt tightening at a rate of 3.5%, Schnabel signaled that may be too optimistic.

One of the European Central Bank’s most senior officials said that investors risk underestimating the persistence of inflation, and the response needed to bring it under control.

“We are still far away from claiming victory,” Executive Board member Isabel Schnabel said in an interview, citing the strength of underlying price pressures and faster wage increases.