ECB’s Schnabel: “More hiking is needed to get to 2%.”

Agustin Wazne FXStreet

European Central Bank (ECB) Executive Board member Isabel Schnabel said on Wednesday that from the present perspective, further interest rate hikes are needed to bring inflation back to the central bank’s 2% target.

Key takeaways:

From today’s view, more hiking is needed to get to 2%.

The ceasefire is not a signal for the ECB to ease vigilance.

ECB rates are not restrictive yet.

War, inflation, and growth will set the timing and size of any future hikes.

The economy is showing relative resilience.”

Schnabel flags more hikes as Euro resilience keeps ECB on front foot

The FXS Speech Tracker score of 8.6 versus a historic 7.1 marks a clear hawkish shift in Schnabel’s tone, underscored by the view that “more hiking is needed” and that current ECB rates are “not restrictive yet.” The insistence that a ceasefire would not reduce vigilance, combined with an emphasis on persistent inflation risks, supports expectations for additional tightening and is Euro-supportive on balance.

By stressing that war, inflation, and growth will shape the timing and size of any hikes, Schnabel keeps the door open to a longer and potentially higher-rate path than previously priced. The reference to the economy’s “relative resilience” further justifies scope for more rate increases, reinforcing a hawkish bias that can underpin Euro dips and limit downside in the near term.

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

GBP/USD appears well offered near 1.3160

GBP/USD builds on Tuesday’s losses, although it now manages to pick up some pace and bounce off earlier multi-month troughs near 1.3140. The Greenback’s solid performance and continued political turmoil in the UK are keeping Cable under persistent pressure, with little sign of a meaningful recovery.

EUR/USD trims losses, hovers around 1.1350

EUR/USD now regains some composure and rebounds to the 1.1350 zone on Wednesday, partially reversing the prior pullback to fresh yearly lows near 1.1320. Meanwhile, spot remains on the back foot as the US Dollar continues to draw support from hawkish Fed expectations and uncertainty over the outcome of US-Iran peace negotiations.

Gold puts $4,000 to the test, new yearly lows

Gold accelerates its decline and gyrates around the key $4,000 mark per troy ounce on Wednesday, its lowest level since November 2025. In the meantime, tighter-for-longer Fed expectations and a broadly firmer US Dollar continue to weigh on the yellow metal, while uncertainty surrounding a potential US-Iran peace agreement has done little to revive demand for the safe haven space.

Crypto Today: Bitcoin, Ethereum, XRP trade under pressure as September Fed rate-hike odds increase

Bitcoin is trading between $62,000 and $63,000 at the time of writing on Wednesday, weighed down by headwinds stemming from macroeconomic uncertainty and geopolitical tensions in the Middle East.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally

Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.