Francois Villeroy de Galhau, the departing member of the European Central Bank's Governing Council, offered a reassuring note for markets. Energy costs have spiked across the euro area, but that shock has not yet spilled over into other parts of the economy, he said. The comment comes as the ECB faces mounting pressure to keep interest rates elevated while weighing the durability of its inflation fight.

Villeroy's observation is significant because economists have long feared that energy-driven price shocks could trigger a wage-price spiral. Second-round effects occur when rising costs push workers to demand higher wages, which businesses then pass on as higher prices, feeding a self-reinforcing cycle. So far, the euro-area economy has avoided that trap.

Markets will watch whether his assessment holds as the ECB's next policy decisions approach. If energy price pressures remain contained, the central bank may have more room to ease without reigniting inflation fears.