Nagel: December rate hike very likely needed

Nagel of the ECB spoke about inflation threats and the interest-rate outlook.

• A December rate increase is very likely needed, in Nagel's view.
• September's price pressures were above expectations, nearing an adverse scenario.
• It is both possible and necessary, Nagel said, to prevent the energy cost surge from inducing broad inflation.

Nagel's stance

Nagel clearly leans towards a December rate increase. His primary worry is that the energy price jump could spread to other economic sectors. Given that September's inflation was above forecasts, he believes there is a strong argument for action in December. Traders are now focused on the level of backing Nagel's opinion has among the Governing Council.