"Rate hike has been well transmitted to money market rates."

European Central Bank (ECB) Chief Economist Philip Lane said on Wednesday that the current transition will require the ECB to continue to raise interest rates over the next several meetings, as reported by Reuters.

Additional takeaways

"Encouraging market intermediation of government deposits remains desirable in the long term."

"Most measures of longer-term inflation expectations currently stand at around 2%."

"If energy costs were to decline or demand were to weaken over the medium term, it would lower pressures on prices."

"Rate hike has been well transmitted to money market rates."

"Eurozone inflation drivers are of a different nature compared to demand-driven overheating dynamics."

"The appropriate monetary policy for the euro area should continue to take into account that the energy shock remains a dominant driving force."

"Inflation dynamics associated with the energy shock component, to which the euro area is particularly exposed, are of a different nature compared to demand-driven overheating dynamics."

Market reaction

EUR/USD is struggling to preserve its recovery momentum after this report and was last seen gaining 0.25% on the day at 0.9995.