ECB Holds Rates; Lagarde to Depart Early, December Hike Likely

The leadership vacuum is the real story here: a president announcing an early exit to pursue outside expression introduces a credibility and continuity question that rate decisions alone do not capture. Markets appear to be leaning on the December signal rather than the succession risk, pricing a hike as near-certain despite the transition. For euro-area borrowers and anyone holding rate-sensitive exposure, the more consequential variable may be who chairs the December meeting and how the governing council's consensus holds together. Whether the succession process stays orderly, and whether energy-driven inflation keeps the hike path intact, are the open questions worth tracking.