Agency: The European Central Bank should remain cautious after raising interest rates in June.

Christopher Buchel from the Investment Solutions Department of Rabobank stated in a report that the European Central Bank should adopt a wait-and-see approach after the widely expected interest rate hike in June. The inflation rate in the euro area climbed to 3.2% in May, with the core inflation rate slightly higher than expected at 2.5%. However, he mentioned that the European Central Bank needs to see stronger signs of energy inflation spreading to a broader range of the economy before embarking on a more aggressive tightening cycle. Buchel stated that the European Central Bank seems to want to act quickly to avoid a repeat of the mistakes of 2022, but the current weak state of the region's economy requires caution. "The risk of policy being overly tight is that it could push the euro area from mild stagflation into recession."