By Marta Vilar – WASHINGTON (Econostream) – Following is the full transcript of the interview conducted by Econostream on 15 April 2026 and updated on 17 April 2026 with Joachim Nagel, President of the Deutsche Bundesbank and member of the Governing Council of the European Central Bank:

Q: Governor, recent ECB communication suggests that holding rates in April could be the preferred option, leaving you among the governors who have most clearly argued in favor of a rate hike if conditions warrant it. Have you changed your mind?

A: What I said a couple of weeks ago still holds: the ECB Governing Council needs to keep all options open, also for April. Since the start of the Middle East war, we have seen that the situation can change daily. The outlook remains highly uncertain. Will there be a lasting solution regarding the Strait of Hormuz? Could oil or gas prices rise again to very high levels? I will come to a conclusion when the Governing Council meets at the end of this month, and I see no merit in restricting ourselves now. We should wait, analyze all relevant data, and see what happens over the next two weeks. 

Q: Does that mean the ECB does not have a tightening bias?

A: Based on what I’m hearing from my colleagues in the Governing Council, everyone assesses the situation similarly, with broad support for keeping all options on the table, and we will make decisions based on all the information available at our next meeting. We are in a very volatile world, making it all the more important to remain flexible and agile.

Q: You mentioned that we are currently somewhere between the baseline and the adverse scenario. Wouldn’t that suggest a tightening bias—in the sense that the balance of risks is tilted more toward rate hikes than cuts?

A: With regard to market expectations for oil and gas prices, we are currently between the baseline and the adverse scenario. However, this can change again very quickly, with prices moving in either direction. This is why I emphasize agility. In such an uncertain and volatile environment, remaining data-dependent and proceeding meeting by meeting is the most appropriate approach. The effects on medium-term inflation are still very uncertain.

Q: You mentioned market expectations. Markets are already doing some of the tightening for you. At some point, will the ECB have to deliver on those expectations?

A: We do not have to deliver on specific expectations. Rather, market participants understand our reaction function very well and, therefore, their rate expectations respond to incoming news. Markets know that monetary policy acts with a broader perspective: if current price increases spill over to medium-term inflation, e.g. via higher longer-term inflation expectations, we would have to act.

Q: Weeks ago you said it was “conceivable” that inflation expectations could rise. Do you still hold that view?

A: “Conceivable” simply means we should not exclude anything and should be prepared for different scenarios. But again, I will base my decision on coming data and analyses. In particular, we will not receive some of the survey data until very shortly before the Governing Council decision. Let me also add: the current situation is very different from 2021–2022. When the Russian war against Ukraine started, inflation was already high because we were coming out of the pandemic. Now, when this Middle East conflict began, inflation was close to our target. So, we are in a much better starting position.

Q: Is stagflation a concern for you?

A: I think that concern is overstated. For example, IMF forecasts for Germany show a slight reduction in growth, falling a bit below 1% in 2026. That is not stagflation, not in Germany and not in the euro area, where the IMF expects growth of 1.1%. We should avoid creating self-fulfilling prophecies.

Q: Finally, on the ECB presidency—Germany has never held the role. Should it pur-sue it, and how do you see your chances?

A: We currently have a very good president: Christine Lagarde. In principle, every central banker on the ECB Governing Council probably has the right skills to take over the top job in the Eurosystem. And external candidates with other profiles are also contenders for the role.