ECB Holds Rates Steady at 2.25%, Eyes Final Hike in September

The European Central Bank (ECB) held its key policy rates steady at 2.25% in July, as expected by markets and consensus.

Christine Lagarde maintained full optionality over future policy rate paths, avoiding precommitment to any particular course of action.

Lagarde noted that the economic outlook had returned to its June baseline after recent moves in energy prices, with risks now considered more balanced.

The ECB's decision was met with little market reaction, but traders are still anticipating a final 25bp rate hike in September, which would take the deposit rate to 2.50%.