The guns may have gone quiet, but the inflation fight is far from over. That is the message from Bundesbank President Joachim Nagel, who warned on June 15 that energy market disruptions from the Iran conflict could keep eurozone inflation stubbornly above target, even after the US and Iran reached an agreement to end hostilities.
Nagel’s warning lands at an awkward moment. It puts him visibly at odds with ECB President Christine Lagarde, who welcomed the preliminary deal with considerably more warmth, citing its potential to bring energy costs down.
Why Nagel isn’t ready to declare victory
The core of Nagel’s concern is straightforward: wars end faster than energy markets recover. Even with a US-Iran agreement in place, he cautioned that normalization in oil supply could take several months, meaning the inflationary pressure that the conflict set in motion does not simply switch off when the diplomats shake hands.
This is not Nagel’s first warning on this front. Back in March 2026, he flagged that a prolonged Iran conflict would elevate eurozone inflation and drag on economic growth. The June 15 remarks suggest he is not yet convinced the threat has passed, even with a deal on the table.
