ECB Accounts Reveal Growing Concerns Over Upside Inflation Risks, Hawkish Repricing Expected

The European Central Bank's (ECB) accounts from its June 10-11, 2026 monetary policy meeting, released today, indicate that policymakers are increasingly concerned about persistent upside inflation risks, even with nearly three anticipated interest rate hikes. The discussions highlighted that the current situation no longer allows for 'looking through' the energy shock, with higher energy prices expected to push inflation above the 2% target over the medium term. Market pricing for ECB hikes by December has risen, now implying a growing chance of three hikes this year. This hawkish repricing led to a sell-off in sovereign bonds, with 10-year Bund yields surging to 3.09% and French OAT yields reaching their highest level since 2009.