Summary of the Governing Council meeting on monetary policy at the European Central Bank

Overview of Recent Financial Developments

Ms Schnabel began her remarks by highlighting a significant rise in geopolitical tensions since the Governing Council’s last monetary policy session on December 17-18, 2025. She pointed out that uncertainty surrounding trade policies had also temporarily returned to the levels seen in the summer of 2025. Despite these developments, fluctuations in the stock market increased only marginally, remaining much lower than during previous periods of market stress. Meanwhile, volatility in the bond market showed minimal response to these risk events and continued to decline. Investor willingness to take on risk was largely unchanged, with risk appetite indicators for both the euro area and the United States staying stable throughout the recent market disturbances.