ECB Holds Rates at 2% as Markets Eye Crypto Implications
The European Central Bank maintained its benchmark rate at 2%, signaling the potential end of its tightening cycle. Policy stability is expected to persist absent major economic shocks, with traders pricing in minimal rate fluctuations for approximately two years.
Market reaction proved muted, with the two-year yield edging up marginally to 2.14%. The ECB revised growth projections upward while forecasting inflation to dip below target in 2026-2027 before normalizing in 2028. Officials noted underlying price pressures remain elevated compared to headline figures.
President Christine Lagarde emphasized data-dependent decision making, stating 'all optionalities remain on the table' without committing to predetermined policy paths. The Governing Council deliberately avoided discussions about future rate cuts or hikes during deliberations.
