Overview

• Eurostat’s flash estimate shows headline inflation at 2.1% in August, up from 2.0% in July, with core inflation steady at 2.3%.
• The ECB ended a year-long easing cycle in July and left the deposit rate at 2%, with economists widely expecting no change next week.
• Isabel Schnabel said policy should remain steady for now and described the current stance as mildly accommodative for a resilient economy.
• She warned U.S. tariffs are inflationary and said risks to the outlook lean higher given trade frictions, firm food prices and robust domestic demand.
• Investors expect rates to stay on hold in the near term while still pricing a good chance of further cuts by June, even as some officials debate the need for more easing later.