European Central Bank (ECB) Executive Board member Isabel Schnabel said in an interview with Bloomberg News published on the 26th that interest rates need to be raised further, as the prolonged Middle East conflict and the resilience of the euro zone economy pose upside risks to inflation. She stated, "At the current level of policy rates, it is unlikely that inflation will return to target in the medium term, so further tightening will be necessary."
Hawkish ECB comments lift German bond yields.
ECB official signals further rate hikes, pushing policy rate expectations up.
