On May 29, 2026, multiple senior officials of the European Central Bank (ECB) delivered intensive speeches, clearly releasing the signal of suspending interest rate cuts. The ECB pointed out that the decline rate of core inflation in the Eurozone is slower than market expectations, and service industry inflation remains highly sticky, which has become the main obstacle to the continuous decline of overall inflation levels.

In addition, the repeated volatility of global energy prices has brought imported inflation pressure to the Eurozone. The regional energy supply structure is still fragile, and the uncertainty of energy costs continues to interfere with the progress of inflation control. Considering the complex inflation situation, the ECB decided to suspend the interest rate cut plan within the year and maintain the current benchmark interest rate level.

The central bank emphasized that the core goal of current monetary policy is to firmly curb inflation and promote the steady return of inflation to the 2% target. Although high interest rates will bring certain pressure on regional economic recovery, curbing persistent inflation is the primary task to ensure long-term stable economic development.

Affected by the policy signal, the euro exchange rate rebounded slightly against the US dollar, European stock markets fluctuated and adjusted, and European bond yields rose marginally. The market has fully adjusted its expectation of the ECB’s monetary policy, abandoning the previous expectation of multiple interest rate cuts within the year.

Market analysts said that the ECB’s prudent policy adjustment is in line with the current Eurozone economic fundamentals. The high interest rate environment will continue for a period of time, which will help stabilize the euro’s exchange rate and curb inflation risks, but may also slow down the pace of regional economic recovery and manufacturing industry revitalization.