ECB's Kocher: Avoid Hasty Policy Actions Amid Middle East Conflict

European Central Bank (ECB) Governing Council member Kocher emphasized the importance of avoiding rushed policy decisions due to the ongoing Middle East conflict. According to Jin10, Kocher stated that it is reasonable to clearly communicate the ECB's stance against inflation trends that deviate from its mission objectives, but there is no need to react prematurely to potential future scenarios that may not materialize. He noted that uncertainty remains high, and while positive signals are welcome, their sustainability is uncertain. Kocher advocated for maintaining an open attitude before and during meetings. He further mentioned that even if the Strait of Hormuz fully reopens, returning to a more normal state will take time, as frictions persist and some energy production and transportation facilities have been damaged. Kocher, often seen as a hawkish member of the council, stressed that while there may be signs of improvement, the economic impact has already occurred, making the baseline scenario the best-case scenario. He also highlighted that medium-term inflation expectations remain fairly stable.