More ECB hikes may be needed to stop inflation, Panetta says - Reuters

European Central Bank Governing Council member Fabio Panetta said further interest rate increases may be necessary to bring inflation back to target, according to Reuters. The remark matters because it comes from a policymaker often associated with the more dovish end of the ECB's spectrum, making a willingness to consider additional tightening a signal about the breadth of concern over persistent price pressures.

For markets, the key takeaway is that the debate has not shifted toward an early pivot. Rate expectations feed directly into euro area bond yields, the euro's exchange rate and borrowing costs for households and firms. When a typically cautious voice acknowledges that more hikes "may be needed," investors tend to reassess how long restrictive policy could last.

What to watch: upcoming euro area inflation prints, wage growth data and commentary from other Governing Council members. These will indicate whether Panetta's stance reflects a broader consensus or a conditional view. The wording is also deliberately hedged — "may be needed" is not a commitment — so the pace and endpoint of any further moves remain data-dependent.