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ECB Expected to Hold Rates as Middle East Tensions Keep September Hike in Focus 
On February 5, 2026, the Governing Council of the European Central Bank kept its three main interest rates unchanged: the deposit facility rate at 2.00%, the major refinancing operations rate at 2.15%, and the marginal lending facility rate at 2.40%. This is the fifth straight hold since the last cut in mid-2025, which shows confidence that middle-term inflation will level at the 2% target. Though obstacles from international trade tensions, geopolitical hazards, and a stronger euro exist, the ECB emphasized supporting elements like low unemployment, healthy corporate and household balance sheets, higher defense and infrastructure spending, and the effects of past rate cuts strengthening euro area resilience.
With the ECB stressing a data-dependent, meeting-by-meeting approach instead of any pre-committed path for future rates, the economic outlook remains cautiously optimistic. Without reinvestments, asset purchase program (APP) and pandemic emergency purchase program (PEPP) holdings will keep running down predictably. Including possible use of the Transmission Protection Instrument (TPI) should market segmentation occur, policymakers confirmed their readiness to modify tools as required to guarantee price stability and easy monetary policy transmission.
In her press conference, President Christine Lagarde highlighted the ECB's flexible approach, observing that policy is in a "good place" while still watching for fresh data on inflation trends, economic activity, and foreign uncertainties. With EUR/USD remaining stable above 1.18, markets have read the ruling as encouraging of constant rates across most of 2026. The ECB's balanced attitude indicates patience, therefore giving ongoing convergence to the inflation goal top importance over hasty loosening or tightening.
