ECB Expected to Hold Rates at 2.5% as Markets Watch December Hike

The ECB's decision to hold is less telling than the guidance that accompanies it, particularly on the 2028 inflation path, which shapes how much room policymakers see for a December move. The mention of French sovereign yields and the Transmission Protection Instrument signals that fragmentation risk, not just inflation, is now part of the reaction function. Whether the ECB pauses quantitative tightening is the other quiet lever worth watching. Lagarde's early departure adds a leadership question to an already crowded agenda, and how she handles it may matter as much as the rate call itself.