FX.co ★ ECB Holds Rates Steady, Outlook Remains Uncertain

The European Central Bank (ECB) opted to maintain interest rates during its first policy meeting of 2026, as anticipated. It reaffirmed its expectation that inflation will stabilize at the 2% target over the medium term. The central bank held the interest rate for main refinancing operations steady at 2.15%, with the deposit facility and marginal lending rates remaining at 2.0% and 2.4%, respectively. The ECB noted that the eurozone economy continues to display resilience, buoyed by low unemployment rates, robust private-sector balance sheets, the phased implementation of public spending on defense and infrastructure, and the lingering positive effects of previous rate cuts. Nevertheless, ECB policymakers warned of uncertainties in the economic outlook, citing potential risks from global trade policies and ongoing geopolitical tensions. Investors are now keenly awaiting insights from President Christine Lagarde’s press conference, seeking indications of how the ECB is evaluating the impact of a stronger euro on its inflation forecast.