'Everything' depends on what's happening in the Middle East: ECB's Kocher

ECB's Kocher states that the inflation and rate outlook hinges on Middle East stability and oil prices. In the mild scenario (oil ~$80), inflation falls to ~2% by 2027, but this still implies one or two further rate hikes. One hike is already decided; further moves depend on data.

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Martin Kocher 8.5

'Everything' depends on what's happening in the Middle East: ECB's Kocher

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The mild scenario assumes that the oil prices are at the moment even the real prices and the forward curve is a bit above them

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it also implies one or two hikes depending on the exact playout of inflation figures. So one hike we have decided upon

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6/12/2026 10:03:43 AM	short term up	7 days later	+0.90%	+0.90%
12/8/2025 1:14:06 PM	medium term cautious up	20 days later	-1.67%	-0.84%

Speaker1 (Kocher)

Everything depends very strongly on what's happening in the Middle East and how stable the situation there is.
The model scenario probably sees oil prices around $80 US, right?

Speaker2 (Host)
Speaker1 (Kocher)

Correct. The mild scenario assumes oil prices are at current levels. It would see inflation go down to around 2% in 2027, but it also implies one or two hikes depending on the exact playout of inflation figures. One hike we have decided upon; we'll see what's going to happen in the next couple of months.

The forward curve is a bit below the mild scenario in the second part of the projection horizon, making it a bit difficult to interpret.

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