Isabel Schnabel: Is Inflation Back?

The ECB published a presentation by Executive Board member Isabel Schnabel titled "Is inflation back?" on June 27, posted as a PDF on the ECB's press pages. Per the title slide, the remarks were delivered at the Petersberger Sommerdialog in Petersberg on 27 June 2026.

Per the slides, oil prices are expected to stay persistently higher as the Strait of Hormuz opens only gradually. One chart tracks the oil price and futures curves against a min-max range since the start of the Iran war — which the chart notes date to 27 February 2026 — alongside Bloomberg and Kalshi-sourced estimates of the probability of the strait reopening. A further slide states that uncertainty remains high, but the announced peace deal, dated 12 June 2026 in the chart notes, makes negative scenarios less likely; it shows June 2026 baseline, adverse, severe and milder scenarios for oil and gas prices.

Another slide argues the energy shock hit the euro area particularly hard but less than in previous oil price shocks, citing terms-of-trade data and the declining oil intensity of euro area real GDP. Per the chart notes, latest observations run to 25-26 June 2026. The full text of any spoken remarks accompanying the slides was not carried in the feed.

Background

Schnabel, a German economist who joined the ECB's six-member Executive Board in January 2020, oversees market operations and has been among the board's most prolific public communicators on inflation dynamics. Her speeches, typically accompanied by dense chart packs, are read by markets as a signal of how the hawkish end of the Governing Council is weighing the data.

The ECB targets 2% inflation over the medium term, and the euro area's vulnerability to imported energy shocks is well established: the bloc imports most of its oil and gas, and the 2022 energy crisis that followed Russia's invasion of Ukraine drove euro area inflation to double digits before a long disinflation. The title question — whether inflation is back — frames a supply-driven oil shock against that recent institutional memory, with the slides' terms-of-trade argument suggesting the euro area enters this shock structurally less oil-intensive than in earlier episodes.

What comes next

Watch for the ECB to publish any accompanying text of the remarks, and for whether the scenario framework — baseline, adverse, severe and milder paths for oil and gas prices — reappears in the ECB's staff projections and Governing Council communication. If the strait reopens more slowly than the probability estimates cited on the slides imply, the persistence of the oil shock would become the operative question for the rate path.