ECB: Rates unchanged as expected, reiterates it is not pre-committing to a particular rate path

Policy framework / reaction function

• Policy remains data-dependent and meeting-by-meeting.


• Reiterates it is not pre-committing to a particular rate path.


• Decisions will hinge on:


• Inflation outlook and surrounding risks.


• Incoming economic and financial data.


• Underlying inflation trends.


• Strength of monetary policy transmission.

Inflation

• Reiterates inflation is expected to stabilise at the 2% target in the medium term.

Growth and activity

• The euro area economy is described as resilient despite a challenging global backdrop.


• Low unemployment, solid private sector balance sheets, the gradual rollout of public spending on defence and infrastructure and the supportive effects of the past interest rate cuts are underpinning growth.

Uncertainty and risks

• The outlook remains uncertain, particularly due to:


• Global trade policy uncertainty.


• Ongoing geopolitical tensions.

Asset purchase programme (APP) and pandemic emergency purchase programme (PEPP)

• The APP and PEPP portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.

Backstop tools

• The Transmission Protection Instrument (TPI) remains available to counter disorderly spreads.

Analysis details (13:47)

• The ECB left rates unchanged, in line with expectations, and largely stuck to its messaging, offering little clues for traders looking for a near-term policy signal. The Governing Council reiterated its data-dependent, meeting-by-meeting approach and again stressed it is not pre-committing to a rate path, echoing recent guidance and its remarks from the December meeting. Its inflation views were unchanged, repeating that price growth is expected to stabilise at the 2% target over the medium-term, despite recent downside surprises, driven mainly by base effects. On growth, the ECB struck a marginally more constructive tone, describing the Euro area economy as resilient, underpinned by low unemployment, healthy balance sheets and supportive fiscal spending. References to elevated uncertainty from global trade policy and geopolitical tensions were consistent with its proir framing. Balance sheet runoff under APP and PEPP continues as already announced, while the availability of the Transmission Protection Instrument (TPI) was also reaffirmed, signalling no change in the ECB’s backstop stance.

05 Feb 2026 - 13:15- Fixed IncomeData- Source: ECB