The European Central Bank left interest rates unchanged at its first policy meeting of 2026, in line with expectations, reiterating that inflation is expected to stabilize at its 2% target over the medium term. The interest rate on the main refinancing operations was maintained at 2.15%, while the deposit facility and marginal lending rates were kept at 2.0% and 2.4%, respectively. The ECB said the euro area economy remains resilient, supported by low unemployment, healthy private-sector balance sheets, the gradual rollout of public spending on defense and infrastructure, and the lingering supportive effects of earlier rate cuts. However, policymakers cautioned that the outlook remains uncertain, particularly due to global trade policy risks and ongoing geopolitical tensions. Investor attention now turns to President Christine Lagarde’s press conference for any signals on how the ECB is assessing the impact of a stronger euro on the inflation outlook.