Here are the key takeaways from today’s ECB rate decision and President Christine Lagarde’s briefing.
The ECB kept borrowing costs unchanged for a second meeting, after lowering rates eight times in the space of a year up until June
Lagarde reiterated that ECB policy is “in a good place,” but didn’t want to confirm economists’ expectations that the easing cycle is over
The comments were enough to push traders to pare rate cut bets. They now price only 4bps of easing by year-end
In other markets, the euro rose 0.4% to $1.1739 and the 10-year German yield gained 2bps to 2.68%
Lagarde again highlighted the ECB’s meeting-by-meeting approach and that it’s not pre-committing to a particular rate path
The ECB lowered its 2027 inflation projection to 1.9%, (so below the 2% target), with core only at 1.8%, but Lagarde downplayed this revision and an expected undershoot in 2026
She also said risks to the economy are now “more balanced” than before and the economy has proven to be resilient
