ECB Holds Rates After Unanimous Vote as Lagarde Signals Readiness to Act

Overview

• Governing Council members unanimously kept the deposit, main refinancing, and marginal lending rates at their current levels.
• Lagarde described policy as agile and said the ECB stands ready to change rates if necessary, with wage monitoring steering moderation.
• She said risks are broadly balanced and reported services-led growth, notably in IT and communications, with incomes supported by a strong labor market.
• Manufacturing remains resilient despite trade difficulties, and Lagarde called for stronger business investment even as firms increase digital spending.
• Lagarde expects government outlays to bolster domestic demand and potentially growth, is tracking AI’s gradual effects on the economy, and welcomed Kevin Warsh’s nomination to lead the U.S. Fed.