ECB accounts: Holding rates would allow for more time to assess trade developments ...Middle East

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Meeting decisionThere was no immediate pressure to change policy rates at the current meetingMaintaining policy rates at their current levels would allow more time to see how trade negotiations unfoldedIt also gives time to thoroughly assess the consequences of any final outcome for the interest rate pathThe transmission of monetary policy continued to be smoothBut it was also argued that transmission to credit was slow and that credit growth remained weakA few members judged risks to be tilted to the upside relative to June projections, especially over the medium-termIt was contended that the economy was proving more resilient than had been expectedThat means a sustained undershooting of inflation is increasingly unlikelyTherefore, an excessive focus on undershooting the inflation target seemed misguidedOverall, there was currently a high option value to waiting for more information and the resolution of some uncertaintyMembers agreed to amend the formulation of the reaction function by adding a reference to the risks surrounding the inflation outlookIn particular, a faithful description of the process leading to interest rate decisions needed to emphasise that the assessment of the inflation outlook took into account the risks surrounding the outlookGiven the exceptional uncertainty and the risks of large inflationary and growth shocks in both directions, it was important to have a two-sided perspective, maintaining full optionality for future meetings and being agile in order to react quickly to large shocks if necessaryCommunication should maintain a careful, neutral tone and be deliberately uninformative about future interest rate decisionsFull accounts

All of this are just supportive commentary and anecdotes in defending their decision to pause rate cuts through the summer. As things stand, that pause looks likely to be extended through to year-end as well. That especially as the economy is showing some resilience at the start of Q3 and with price pressures keeping policymakers on their toes for now, alongside trade developments.

This article was written by Justin Low at investinglive.com.

Hence then, the article about ecb accounts holding rates would allow for more time to assess trade developments was published today ( Thursday 28/08/2025 - 02:42 PM ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.

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Last updated : 28 August 2025 clock 02:42 PM

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ECB accounts: Holding rates would allow for more time to assess trade developments ...Middle East

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