The European Central Bank isn’t messing around on inflation. Martin Kocher, ECB Governing Council member and Governor of the Austrian National Bank, reaffirmed the central bank’s commitment to hitting its 2% inflation target, noting that secondary effects from recent energy disruptions haven’t materialized in the way some feared.

Eurozone inflation clocked in at 3.2% in May 2026, still well above the target, driven largely by Middle East-related energy disruptions that sent ripple effects through transport costs, supplier contracts, and wage negotiations across the bloc.

The rate hike heard across the eurozone

On June 15, the ECB raised its deposit rate by 25 basis points to 2.25%. It was the first increase in nearly three years.

Higher transport costs, renegotiated supplier contracts, and persistent wage pressures are expected to keep inflation elevated well into 2027. Even as headline oil prices fall post-ceasefire, those downstream effects take time to unwind.

Kocher made a point worth noting: the ECB doesn’t need to react to every minor, short-term deviation from the 2% goal.

Echoes of 2022 and the inflation playbook

Kocher’s remarks carry unmistakable echoes of the 2022 Russia-Ukraine energy crisis, when Europe learned the hard way that energy shocks don’t end when commodity prices stabilize. The secondary effects, wages adjusting upward, multi-year supplier contracts locking in higher costs, logistics chains repricing, those linger long after the initial shock fades.

The ECB navigated that period with an aggressive hiking cycle that eventually brought rates to restrictive territory before gradually easing. Now they’re back in tightening mode, though the 25 basis point move suggests a more measured approach this time around.

The 3.2% May inflation reading, while elevated, is a far cry from the double-digit prints Europe saw in late 2022 and early 2023.

What this means for crypto and risk assets

When the ECB raises rates, it ripples through global capital flows, currency markets, and the broader risk appetite that drives speculative assets including crypto. Higher interest rates in Europe mean higher borrowing costs for businesses and consumers, which tends to cool economic activity and dampen enthusiasm for assets that don’t generate yield.

Kocher’s emphasis on not overreacting to short-term deviations suggests the ECB isn’t about to embark on an aggressive hiking campaign. A single 25 basis point move is very different from the 75 basis point jumps that characterized the 2022-2023 cycle.