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Essentials of Monetary Policy

ECB On Hold For Now

February 5, 2026
Tiago Figueiredo
Macro Strategist

According to the European Central Bank (ECB)

  • The ECB kept rates unchanged at 2.00%, in line with expectations.
  • Stimulative fiscal policy is giving the ECB more confidence to remain on hold.
  • That said, we believe the strengthening euro will increase pressure to cut rates.

Implications

The ECB left its policy rate unchanged at 2.00% as was widely expected by market participants. There were no new projections accompanying today’s announcement. The latest statement offered a seemingly upbeat assessment of economic activity while still acknowledging that uncertainty remained elevated. Overall, the arrival of fiscal stimulus is giving the ECB more confidence to remain on hold. While President Lagarde was not concerned about currency strength, we believe the tone will shift as the year progresses. We still expect the ECB will recommence its easing cycle later this year.

2026 Schedule of Central Bank Meetings

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