European Central Bank Governing Council member Martins Kazaks has voiced no objection to market bets anticipating two interest rate increases beginning in June 2026. The Latvian official stated on Wednesday that conflict in Iran is driving inflation higher and weighing on economic growth. He noted that if secondary price effects emerge alongside rising energy costs, the ECB would be compelled to act.

"For the eurozone, markets are pricing in two rate hikes starting in June," Kazaks said. "At this point, I do not oppose that. Let's see how the situation evolves." ECB policymakers are assessing how to respond to hostilities in the Middle East, while France and Spain's upward revisions to inflation expectations this week underscore ongoing price pressures. Officials will hold their next meeting on April 29–30, where traders expect interest rates to remain unchanged.

While acknowledging stagflation as a risk, Kazaks indicated that the outcome of this month's meeting remains uncertain. "Will it be April, or June? We have shown that we can act very quickly and decisively. So let's wait and see," he remarked.