This news broke on Saturday via Reuters but it isn't anything that we haven't heard of, as it just echoes sentiment as put up from other ECB policymakers since last week (the latest from Nagel and Elderson). But I guess it feeds into some added hawkishness and that is perhaps what helped the euro to gap higher in the early morning at the open today.
The report here says that policymakers are seeing a growing probability of having to raise key rates into "restrictive territory". In other words, that means a level where rates would start to weigh on the economy - in which they see is at 2% or above.
The sources cited said that this would most likely happen if the ECB's first inflation projection for 2025, due to be published in December, is still above 2%. For some context, the ECB currently sees inflation at 2.3% in 2024 - though the sources said policyumakers see that as being closer to 2% now amid the latest gas prices.
