The European Central Bank held interest rates steady on April 30, as persistent inflation and the Middle East conflict keep policymakers cautious. Executive Board member Klaas Knot Sleijpen warned that inflation's trajectory depends on the crisis's duration.
Oil prices hit a four-year high, driving energy inflation to 10.7% year-over-year. Eurozone inflation stands at 3% - above the ECB's 2% target - while GDP growth stagnated at just 0.1% in the first quarter of 2026. The region faces stagflation risks.
Despite the hold, prediction markets show a 100% probability of a 50+ basis point rate cut by the April 2026 meeting. Traders also expect up to three rate hikes this year to curb price pressures.