European Central Bank Chief Economist Philip Lane said on Thursday that the key message of the February meeting was that risks to inflation are tilted to the upside in the near term, according to Reuters. Lane said that most of the current inflation was an imported inflation shock, given there has not been a boom in domestic demand. Gradualism thus makes sense in this scenario, he added, saying that if inflation is to settle around 2.0% in the medium-term, the policy path is different from open-ended, but won't require a significant tightening cycle. The size and frequency of rate moves will depend on the inflation regime, he added, noting that other increments are possible beyond 25bps moves. 

Market Reaction

The euro has not reacted to the latest Lane comments, with FX markets more focused on the escalating geopolitical atmosphere in Eastern Europe at the moment.