ECB Holds at 2.25%, Energy Inflation Risk Still Unfolding

The ECB repeated its data-dependent, meeting-by-meeting approach. It said it is closely monitoring the intensity and duration of the shock, as well as its indirect and second-round effects. The phrase "second-round effects" is the one rate markets keyed on – it signals a path from higher energy costs into wages and core inflation, even if that path is not yet locked in.

The statement did not endorse market pricing for another rate hike. It said the Council is not pre-committing to a particular rate path, leaving the policy door open without pushing it further ajar.

President Christine Lagarde's press conference at 14:45 CET will be the real event. Markets will watch whether she validates the view that energy-driven inflation could force a move later this year, or whether she pushes back on that read. The statement itself leaned hawkish on the margin – enough to keep euro short-dated yields bid into the presser.