Preview: ECB On Hold in February, As a Strong Euro Keeps a Lid on Inflation

In this paper, we discuss:

• The ECB is expected to stay on hold, with inflation below target and growth holding up;
• A stronger euro is adding disinflationary pressure and tightening conditions;
• Divisions persist between doves worried about weak momentum and hawks focused on wages;
• Market pricing reflects these cross-currents, with a roughly 30% probability now assigned to a rate cut in September 2026 and fading expectations of any tightening in 2027.

Download PDF: ECB Preview February 2026