ECB, decision on rates today: confirmation of 2.50% expected, energy and crisis weigh on France

While President Christine Lagarde announces her resignation, effective from 7 February 2027, the Frankfurt institute brings together the board for a new decision on the cost of money: according to experts there will be no change. An increase is more likely in December

On the day of the announcement of Christine Lagarde's resignation as president of the European Central Bank (from 7 February 2027), the Frankfurt institute meets its board for a new decision on interest rates. According to analysts, we will opt for a pause in increases, after the deposit rate was raised to 2.50% in September. The one on main refinancings is 2.65%, the one on marginal loans is 2.90%. A possible new increase is more likely during the December meeting. The objective is always to bring inflation back to 2%. It is currently at 3.8% in the Eurozone, with Eurostat data updated in September. In August it was at 3.2%.

Why the ECB should keep rates steady

It seems that the ECB will keep rates steady due to global financial conditions which are already particularly tense with the volatility of bond markets and political and economic uncertainties, starting with fears of an energy crisis in the winter months due to the situation in the Middle East, always on the verge of a new escalation. The situation in France is also having an impact, where government bond yields have risen to their highest since 2002, with investors demanding increasingly higher premiums to lend them money. The French political crisis and social protests are weighing on the government's ability to find the right framework for approving the budget for 2027: a majority must be found for the measures necessary to reduce the deficit.

The Fed keeps rates steady

Meanwhile, the US Federal Reserve has also decided to keep interest rates steady. The decision arrived yesterday, October 28, a few days before the US midterm elections (even though President Kevin Warsh assured that the electoral date "played no role" in the choice). The cost of money in the USA, in line with expectations, therefore remains in the range between 3.75% and 4%, after the 0.25% increase, the first in three years, decided unanimously last month.