Joachim Nagel: Inflation Likely to Stay Elevated Amid Geopolitical Tensions

© Oliver Rüther

30.06.2026

At the ECB Forum in Sintra, Portugal, Bundesbank President Joachim Nagel spoke with CNBC ’s Annette Weisbach about the challenges facing the euro area economy and the outlook for monetary policy. In the Interview, he said that inflation for this year will probably stay significantly above the target, with energy prices still affected by ongoing geopolitical tensions. He noted that the situation remains “opaque” and that it is too early to predict when inflation will return to target levels. Monetary policy has to remain vigilant, Nagel said, highlighting the need for caution and data-driven decisions. On economic growth, Nagel acknowledged that Europe is behind and stressed the importance of strengthening capital markets and implementing structural reforms. He welcomed recent steps to improve Germany’s pension system: This was good news for Germany and it’s an important step forward for strengthening the capital market and the capital markets in Europe, Nagel said. Nagel: I hope that we will see more peace efforts and this is giving certainty to the economy. Nagel also addressed the impact of disruptive technologies like AI , expressing optimism about German industry’s ability to adapt and innovate. He further underscored the importance of stable public finances and geopolitical stability for supporting investment and economic certainty: I hope that we will see more peace efforts and this is giving certainty to the economy. As the ECB prepares for its next policy meetings, Nagel concluded: We have to wait until we have all the information necessary to come to a conclusion. I will keep all the options open. A special note was made about the presence of Kevin Warsh at the forum. Nagel welcomed Warsh’s participation: Everyone is appreciating that he’s following the good traditions that Fed colleagues are coming to this place, so he’s very welcome here.