STORY: The European Central Bank left interest rates unchanged as expected on Thursday (April 30).
But signaled its growing concerns over soaring inflation.
That led to bets from investors it would lift rates a number of times this year with a first move in June.
Inflation jumped to 3% this month, well above the bank's 2% target.
A further rise is expected as the Iran war has pushed oil prices to a four-year high.
The conflict makes it likely the energy impact sets off a hard-to-break inflation spiral.
ECB President Christine Lagarde.
"The implications of the war for medium-term inflation and economic activity will depend on the intensity, the duration of the energy price shock, and the scale of its indirect and second round effects."
Financial markets now see hikes in June and July.
They project one further move in the autumn as they believe the ECB will want to stop a possible inflation spiral quickly.
Any rate hike cycle is likely to be far more gentle than four years ago.
Back then, the ECB had to lift its key rate by a combined 450 basis points over a year to stop runaway price growth.
Price pressures are far weaker now, and the second-round inflation effects aren't yet visible.
The euro zone economy itself barely grew in the first quarter, even before the war had any real impact.
And core inflation slowed to 2.2% in April from 2.3%, suggesting second-round effects haven't yet taken effect.
Some economists think the energy shock itself could cut as much as half a percentage point off economic growth.
That would be roughly half of the bloc's projected expansion in the coming year.
The ECB's decision follows other major central banks in the Japan, the U.S. and the Bank of England.
Those institutions also left rates unchanged this week, while showing concern over price growth.
