The European Central Bank has been actively communicating about the current trajectory of policy rates. In mid September, officials emphasized that the rate increases already delivered in the euro area have been substantial and rapid. The sequence of moves in 2022 and 2023 marked a dramatic shift in monetary policy, reflecting shifting inflation pressures and evolving growth dynamics. Since then, market participants have watched developments with heightened attention as the policy stance remains at the high end of historical experience. The Bank of Spain has suggested that rate rises may not continue, arguing that keeping policy at the current level could suffice if conditions remain stable for a meaningful period. Pablo Hernández de Cos, president of the Spanish central bank and a key adviser to the ECB, reiterated this cautious optimism in a recent public appearance amid broader IMF discussions.
