The quick retreat of energy prices in recent weeks has caught the European Central Bank off guard but the political outlook remains volatile and requires vigilance, Bundesbank President Joachim Nagel said on Friday.
"We do not know if there is really a peace agreement coming," Nagel told a conference. "So we should be vigilant, we should be open to whatever might come, keeping our optionalities."
Oil prices, a key driver of inflation, have fallen faster than the ECB's optimistic scenario, suggesting that there is no urgency in any further policy tightening.