European Central Bank Governing Council member Simkus: No significant second-round inflation effect observed, not worried about the eurozone bond market

(1) European Central Bank Governing Council member Šimkus stated that so far, no significant second-round inflation effects triggered by rising oil and gas costs have been observed, which is consistent with previous statements by European Central Bank President Lagarde; however, the longer energy prices remain high, the greater the likelihood that price increases will be transmitted to other sectors. (2) He noted that rising sovereign bond yields are a factor that could have a counter-effect, but he is not too concerned about the eurozone bond market. (3) Previously, French government bonds led the decline, sparking a round of sell-offs in the European bond market. He believes that the rise in French government bond yields is mainly due to changes in economic conditions, with the market reassessing its debt levels, political uncertainty, and fiscal fundamentals; different countries face different market financing costs, which is, to some extent, normal.