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Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Tuesday, Wednesday and Thursday, 3-5 June 2025
3 July 2025
1. Review of financial, economic and monetary developments and policy options
Financial market developments
Ms Schnabel started her presentation by noting that the narrative in financial markets remained unstable. Since January 2025 market sentiment had swung from strong confidence in US exceptionalism to expectations of a global recession that had prevailed around the time of the Governing Council’s previous monetary policy meeting on 16-17 April, and then back to investor optimism. These developments had been mirrored by sharp swings in euro area asset markets, which had now more than recovered from the shock triggered by the US tariff announcement on 2 April. On the back of these developments, market-based measures of inflation compensation had edged up across maturities since the previous monetary…