$272.69K
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$272.69K
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This market will resolve to the amount of basis points the upper bound of the deposit facility rate is changed by versus the level it was prior to the European Central Bank's (ECB) February 2026 meeting. If the deposit facility rate is changed to a level not expressed in the displayed options, the change will be rounded up to the nearest 25 basis points and will resolve to the relevant bracket. For example, if the deposit facility rate is increased or decreased by 12.5 basis points, it will be
Prediction markets are expressing near-certainty that the European Central Bank will hold interest rates steady at its February 2026 meeting. The leading contract, "Will the ECB announce no change at the February 2026 meeting?" is trading at 97 cents, implying a 97% probability. This price indicates the market views a pause as virtually assured, with almost no perceived chance of a hike or cut at that specific meeting. The other markets for specific rate moves show negligible probability, with a 25 basis point cut priced at just 2% and a hike at 1%.
Two primary factors are cementing this expectation of policy stasis. First, the current macroeconomic trajectory suggests the ECB's tightening cycle has concluded. With Eurozone inflation having fallen significantly from its peak toward the 2% target, the central bank has shifted focus to maintaining restrictive levels for an extended period to ensure price stability is durable. Second, forward guidance from ECB Governing Council members has consistently signaled that the next policy move will be a cut, but not until economic data, particularly wage growth trends, provides clear confidence that inflation is sustainably subdued. The February 2026 meeting is seen as too early for that decisive data confirmation, placing it firmly within a "hold" phase of the cycle.
The overwhelming consensus for a hold leaves little room for movement, but a dramatic shift in economic data could theoretically impact the minimal pricing for a cut. A severe, unexpected downturn in Q4 2025 or Q1 2026 GDP figures, or a precipitous drop in inflation well below target, could increase speculation of an earlier easing. Conversely, a significant resurgence of inflation before the meeting, perhaps from an energy price shock, could revive fringe pricing for a hike. The release of key wage growth and inflation projections in late 2025 will be critical for shaping the narrative for 2026 policy. However, given the 97% probability, any meaningful odds change would require a fundamental and sudden reassessment of the entire economic outlook.
AI-generated analysis based on market data. Not financial advice.
This prediction market focuses on the potential change to the European Central Bank's deposit facility rate following its monetary policy meeting in February 2026. The deposit facility rate is the interest rate banks receive for depositing excess liquidity overnight with the ECB, and it serves as a key tool for steering short-term money market rates. The market resolves based on the change, measured in basis points, of the upper bound of this rate compared to its level prior to the February 2026 meeting, with changes rounded to the nearest 25 basis points. This specific forward-looking contract reflects market expectations for ECB policy over a two-year horizon, a timeframe that incorporates numerous economic variables including inflation trends, eurozone growth, and global financial conditions. Interest in this market stems from its role as a barometer for the future path of monetary policy in the Eurozone, which directly influences borrowing costs for governments, businesses, and households, currency valuation, and investment flows. Analysts and traders use such instruments to hedge risk or express views on the ECB's policy trajectory amid ongoing debates about the appropriate pace and endpoint of its policy normalization following the historic rate-hiking cycle that began in 2022.
The ECB's deposit facility rate has undergone dramatic shifts in recent history. From June 2014 to July 2022, it was negative, reaching a low of -0.50% in September 2019 as the ECB employed unconventional tools to fight deflationary risks following the eurozone debt crisis. This era of negative interest rates ended decisively in July 2022 when the ECB initiated its fastest-ever hiking cycle to combat surging inflation, which peaked at 10.6% in October 2022. By September 2023, the deposit facility rate had been raised to 4.00%, its highest level since the launch of the euro in 1999. The historical precedent for a policy meeting in February is limited, as it is not one of the ECB's traditional 'big' meetings where new macroeconomic projections are published. However, the February 2026 meeting will occur in the context of whatever policy stance is established in late 2025. Past cycles suggest that once rates reach a peak, the ECB typically holds them at a 'plateau' for an extended period before considering cuts, a pattern observed after the 2011 hikes. The decision in February 2026 will thus be shaped by whether the ECB is still in a holding pattern, beginning an easing cycle, or, less likely, resuming a tightening cycle based on new inflationary data.
The level of the ECB's deposit facility rate fundamentally shapes the economic environment for over 345 million people in the Eurozone. It directly influences the interest rates on mortgages, business loans, and government debt, affecting investment decisions, consumer spending, and public finance sustainability. A higher-than-expected rate in February 2026 could tighten financial conditions, potentially slowing economic growth and increasing debt servicing costs for highly indebted member states like Italy and Greece. Conversely, a lower-than-expected rate could stimulate the economy but risk reigniting inflation if cut prematurely. Beyond the Eurozone, ECB policy affects global capital flows and currency markets. A relatively hawkish ECB can strengthen the euro, impacting European exporters and altering global investment allocations. The decision therefore carries significant weight for financial stability, the region's competitive position, and the broader project of European economic integration, as divergent economic conditions across member states complicate a one-size-fits-all monetary policy.
As of late 2024, the ECB has begun a cautious easing cycle, having initiated its first interest rate cut in June 2024 after holding rates steady for nearly a year. The policy stance remains focused on ensuring inflation returns sustainably to the 2% medium-term target. The latest ECB staff macroeconomic projections, published in September 2024, guide expectations for the coming years. Market participants are actively debating the speed and depth of the expected easing cycle, with attention on wage growth data and energy price developments as key determinants of the future path. The Governing Council emphasizes a data-dependent, meeting-by-meeting approach, providing limited explicit forward guidance about 2026, which increases the uncertainty captured by this prediction market.
It is the interest rate the European Central Bank pays to commercial banks for deposits held overnight in its deposit facility. It is one of the ECB's three key policy rates and forms the lower bound of the corridor system used to steer short-term money market rates like ESTR (Euro Short-Term Rate).
The decision is made by the ECB's Governing Council based on a comprehensive assessment of the inflation outlook, economic and financial data, and the dynamics of underlying inflation. The Council aims to maintain medium-term price stability, defined as inflation at 2%.
The ECB closely monitors the Harmonised Index of Consumer Prices (HICP) for headline and core inflation, negotiated wage growth figures, GDP growth and forecasts, unemployment rates, and various surveys of business and consumer expectations. Data on bank lending conditions and market-based inflation expectations are also critical.
The main refinancing rate (or 'refi rate') is the rate at which banks can borrow weekly funds from the ECB, forming the middle of the rate corridor. The deposit facility rate is the rate for overnight deposits and is typically lower, forming the floor. Changes to both usually occur in tandem.
It is possible, but depends entirely on the inflation and growth outlook at that time. If inflation is convincingly at target and the economy is weak, cuts are likely. If inflation proves sticky, the ECB may hold rates steady or, in a less probable scenario, consider further hikes.
Higher ECB interest rates relative to other major central banks like the Federal Reserve tend to increase demand for euro-denominated assets, which can strengthen the euro's exchange rate. Conversely, lower relative rates can weaken the euro.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
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4 markets tracked
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| Market | Platform | Price |
|---|---|---|
| Poly | 97% |
| Poly | 2% |
| Poly | 1% |
| Poly | 1% |
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