FX.co ★ ECB Expected to Hold Rates Steady for a Third Meeting

The European Central Bank is anticipated to maintain steady interest rates for the third meeting in a row on Thursday, as officials exercise caution amid indications of a stable economy and easing inflation pressures. The primary refinancing rate is expected to stay at 2.15%, while the deposit facility rate remains at 2.0%. Recent statements from ECB representatives suggest that the existing policy aligns with the 2% medium-term inflation objective. They have emphasized that decisions will proceed "meeting by meeting," indicating minimal inclination toward immediate easing, despite ongoing geopolitical strains, trade policy uncertainties, and the potential fiscal implications of increased defense expenditure. From June 2024 to June 2025, the ECB reduced borrowing costs by 200 basis points, halting in July once inflation met the target. Currently, markets foresee rates remaining unchanged in the short term, with a possible 25-basis-point reduction anticipated by July 2026.