This may not be the first time investors have heard this signal, since earlier we have reported a source's statement that the European Central Bank (ECB) will take extraordinary measures in the fight against inflation.
But this time, the words themselves came out of the mouth of President Christine Lagarde who said the ECB may have to raise interest rates to a level that could stifle economic growth.
At its recent meeting, the central bank took the drastic step of raising rates by 75 basis points to 1.25%, the highest level since 2011.
According to President Lagarde, interest rates may rise to the level of 'restrictive territory' if there is evidence that high inflation risks affecting price expectations.
A similar point will be taken if the current energy supply shock caused by high costs darkens the European Zone's growth prospects, Lagarde said.
There is talk among policymakers to stop raising rates when they reach a 'neutral' level, which neither stimulates nor suppresses growth.
However, now more and more policymakers see the risk that rates will have to go higher.
Despite this, Christine Lagarde did not give any indication of an October rate hike and only reiterated that the ECB will decide on the next decision through a meeting.
Investors are now divided on whether the central bank will implement a 50 basis point or 75 basis point hike in October.
