Lagarde: ECB Has Not Seen Substantial Second-Round Effects

Lagarde's emphasis on second-round effects is a signal that the ECB's reaction function remains anchored to wage and price-setting behavior rather than headline shocks, which matters for rate-sensitive pockets of crypto and tokenized markets that trade off euro-area liquidity expectations. The absence of newly identified material risks suggests the central bank sees its existing baseline as broadly intact, limiting the case for a policy surprise. Whether second-round effects stay contained as the ECB watches them is the open question, and that vigilance language is the part worth tracking.