ECB's De Marco says stronger core inflation could justify action
Comments follow a Spanish inflation reading that pushed euro area core inflation to a fresh high
Published
European Central Bank official De Marco said on Tuesday that stronger core inflation could be grounds for the ECB to act, adding a conditional hawkish voice to the rate debate.
The remark follows data on Spain's harmonized inflation, which reached 5.0% year over year in September, above a consensus of 4.9% and up from 4.6% in August. Core inflation in Spain rose to 3.1%, its highest reading since August, when it stood at 2.9%. The figures pushed the euro area core inflation reading to 3.1%.
Traders had pared the odds of an October rate increase to below 40% after two hikes earlier this year, with bets scaled back further as officials pointed to mixed signals on inflation and wages. De Marco did not commit to a specific meeting and repeated the ECB's standing position that any move depends on the data, but by tying possible action explicitly to core inflation strength rather than headline figures or energy costs, the comment gives policy hawks a more direct hook than recent central bank commentary has offered.
The shift is not large enough on its own to force traders to reprice October or December meetings, but it modestly firms the case for a live move at either one. That leaves the euro and rate-sensitive assets tied to further tightening with a mildly bullish tilt following Tuesday's data.