REVIEW: ECB Remains on Hold, In Spite of the Strong Euro

In this paper, we discuss:

• The ECB’s decision to remain on hold, keeping rates unchanged amid steady growth and inflation near target;
• The strong euro as a growing policy consideration, tightening conditions despite not being a formal target;
• Inflation falling back below 2%, with core and wage pressures easing gradually;
• The ECB’s emphasis on structural reforms, including capital markets union, the digital euro, and innovation;
• Markets pricing rates on hold into 2026, with only limited probability of cuts or hikes.

Download PDF: ECB Review February 2026