Dimitar Radev, Governor of the Bulgarian National Bank and a member of the ECB Governing Council, is sounding the alarm. The message is simple: move fast on inflation or pay more later.

Radev stated on April 7 that the European Central Bank must be prepared to raise interest rates swiftly if the energy price surge from the ongoing Iran conflict translates into persistent inflation. Euro area inflation has already blown past the ECB’s 2% target, and the 2026 inflation forecast has been revised upward to 2.6%.

The case for urgency

Radev flagged exactly this risk. As early as March 23, he pointed to emerging signs that second-round inflation effects were already taking shape in connection with the Middle East conflict. By April, his tone had sharpened.

He warned that inflation expectations could rise more quickly than usual because of the geopolitical shock layer sitting on top of an already complicated economic picture. The balance of risks, in his view, has shifted meaningfully.

What the ECB actually did

Despite Radev’s hawkish posture, the ECB held its main refinancing rate steady at 2.15% during its April meeting. No hike. Not yet.

Radev himself acknowledged it was too early to determine whether a rate increase would be necessary by the next decision on April 30.

Bulgaria’s new seat at the table

Radev’s comments carry extra weight for a specific reason. Bulgaria joined the euro on January 1, 2026, making Radev one of the newest voices on the Governing Council. Bulgaria itself has experienced relatively mild inflation impacts so far, and public support for the euro adoption reportedly remains solid.

What this means for investors

If inflation continues overshooting and the ECB pivots from holding to hiking, it will reprice a significant chunk of the European fixed-income market. Bond yields would rise, pushing prices lower. Duration-heavy portfolios would take the hit first.

The practical takeaway for anyone with exposure to European assets: watch the inflation prints between now and April 30 with unusual attention. If core inflation accelerates or energy prices stay elevated, Radev’s position becomes harder for the rest of the Council to ignore.