EUR/USD
1.17334
-0.057%
Gold
4333.25
-0.116%
Oil
56.128
-1.004%
USD/JPY
155.465
-0.143%
GBP/USD
1.34057
0.234%
GBP/JPY
208.417
0.098%
Real-time News
On December 18th, ING analyst Carsten Brzezic pointed out that the European Central Bank (ECB) is unlikely to change its current policy stance in the near future. He stated that interest rates have remained unchanged for over six months, indicating that the ECB will not begin cutting rates unless there is a significant decline in inflation or economic growth. "Inflation forecasts, in particular, further confirm the ECBs current policy stance is correct." Due to a slower-than-expected decline in services sector inflation, the ECB slightly raised its 2026 inflation forecast to 1.9%. "Given that inflation expectations remain at or slightly below 2%, and economic growth is expected to be close to potential growth levels, there is no reason for the ECB to change its policy stance in the short term."Statement Section: 1. Interest Rate Decision: The deposit facility rate remained unchanged at 2%, in line with expectations, marking the fourth consecutive meeting without change. The main refinancing rate and marginal lending rate remained unchanged at 2.15% and 2.40%, respectively. 2. Inflation Outlook: Inflation is projected to be 2.1% in 2025, 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. (September forecasts were 2.1%, 1.7%, and 1.9%, respectively) 3. Voting Results: The interest rate decision was unanimously passed. 4. Economic Outlook: GDP growth is projected to be 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and 1.4% in 2028. (September forecasts were 1.2%, 1.0%, and 1.3%, respectively) 5. Policy Outlook: No specific interest rate path was pre-committed, and all tools are prepared to be adjusted at any time. Lagardes Press Conference: 1. Economic Outlook: The economy is resilient. 1. **Services-led growth will continue in the near term.** Trade tensions have eased. 2. **Inflation Outlook:** Underlying inflation remains consistent with the 2% medium-term target. Forward-looking indicators suggest wage growth will slow. Inflation should decline in the near term. 3. **Interest Rate Outlook:** The ECB is well-positioned. No rate hikes or cuts were discussed today. All options should be on the table. 4. **Other Matters:** Given the uncertainty, we are simply unable to provide forward guidance. There is no preferred candidate for ECB President. Executive Board member Schnabel is one suitable candidate. 5. **Market Reaction:** The money market is pricing in a 45% probability of an ECB rate hike by March 2027, up from 35% before the statement was released.The European Central Bank expects inflation to be below 2% in the first quarter of 2026, the third quarter of 2026, and the fourth quarter of 2027.The European Central Bank projects wage growth of 4% in 2025, 3.2% in 2026, 2.9% in 2027, and 3% in 2028.The European Central Banks forecasts assume an oil price of $69.2 per barrel in 2025; $62.5 per barrel in 2026; $62.6 per barrel in 2027; and $64 per barrel in 2028.
