The President of the Bundesbank, Joachim Nagel, who is also a member of the European Central Bank (ECB) Governing Council, hinted that the ECB would need to raise interest rates again.

In a keynote at the 79th Siemens Bankers Conference on Friday, Nagel added that “If the situation stays as it is, it seems highly probable that we’ll have to act again,” adding that monthly price rises increase the chances of second-round effects.

He noted that core inflation “is still elevated, and short-term inflation expectations have risen in line with the jump in headline inflation.”

Key takeaways:

It’s highly probable ECB will have to act again.

Early stages of pricing chain point to upward pressures.

Short-term inflation expectations have risen.

Outlook has deteriorated since September.