Finance
Calm Judgment Will Prevail Over Haste at Ecb, Rehn Says
Published by Global Banking & Finance Review®
Posted on April 16, 2026
2 min readLast updated: April 16, 2026
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Olli Rehn urges the ECB to avoid rushed decisions in the face of a recent energy-driven inflation surge, stressing that future policy should hinge on whether the shock has lasting effects or triggers wage and price spirals.
ECB Prioritizes Calm Judgment Over Haste Amid Inflation Concerns: Rehn
ECB's Approach to Inflation and Policy Decisions
Rehn Emphasizes Importance of Judicious Response
WASHINGTON, April 16 (Reuters) - The European Central Bank still has a chance to look past the current inflation shock and calm judgment must prevail over haste, Finnish central bank chief Olli Rehn said on Thursday.
Euro Zone Inflation Surges Beyond Target
Euro zone inflation jumped well above the 2% target last month as oil prices surged, prompting policymakers to debate whether to raise interest rates to prevent the shock from triggering a broader inflation spiral.
Assessing the Impact of the Inflation Shock
"What matters most is not the immediate increase in prices, but whether the shock has persistent effects on inflation and the general price level," Rehn told a conference in Washington. "Right now, the outlook is foggy."
Potential for ECB to Look Past Temporary Shocks
He said that if the damage to energy markets remained limited in time and scale, it could be "possible though by no means certain" for the ECB to look past the shock.
Conditions That May Require Decisive ECB Action
However, decisive and forceful ECB action could be needed if the energy shock began generating so-called second-round effects on prices and wages, and if longer-term inflation expectations moved higher.
Maintaining Calm Judgment in Policy Decisions
"Calm judgment will prevail over haste, and no decisions are predetermined," Rehn said.
(Reporting by Balazs Koranyi. Editing by Mark Potter)
Key Takeaways
- •Euro‑area inflation jumped to around 2.5% in March 2026, driven by surging oil prices amid the Iran war; core inflation rose, raising the risk of persistent price pressures. (apnews.com)
- •The ECB raised its 2026 inflation forecast to 2.6%, signaling elevated risks if energy prices remain high, though long‑term inflation expectations remain anchored for now. (investing.com)
- •Rehn advocates a measured, data‑dependent approach—calm judgment over haste—with policy flexibility if second‑round effects materialize, but restraint if the energy shock proves transitory. (apnews.com)
References
Frequently Asked Questions about Calm judgment will prevail over haste at ECB, Rehn says
1What did Olli Rehn say about the ECB's approach to inflation?
Olli Rehn emphasized that calm judgment must prevail over haste and decisions are not predetermined regarding inflation response.
2Why is the ECB discussing a possible interest rate increase?
The ECB is debating a rate hike because euro zone inflation rose well above target due to surging oil prices.
3Under what conditions might the ECB act forcefully?
The ECB could act decisively if the energy shock produces second-round effects on prices and wages or if inflation expectations rise.
4Is the ECB certain about looking past the current inflation shock?
No, Rehn stated it is possible but not certain, depending on the duration and scale of energy market disruptions.
