ECB Warns Against Predictable Rate Path as Inflation Remains a Concern

Dimitar Radev, Governor of the Bulgarian National Bank and member of the ECB Governing Council, is cautioning against market expectations that the European Central Bank has locked itself into a predictable interest rate path. In a recent statement, Radev emphasized that past rate hikes do not dictate future ones, and the ECB will let data guide its decisions.

The warning comes after the ECB raised rates in June and September 2026, its first tightening cycle since 2023. These moves were driven by inflation climbing above 3%, fueled by higher energy prices linked to geopolitical tensions in the Middle East.

Radev previously described the ECB's interest rates at around 2.5% as appropriate given the prevailing inflation picture, and noted that rate hikes would only be warranted if there was clear evidence of entrenched inflation persistence, particularly in services and wages.