Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 4-5 February 2026

5 March 2026

1. Review of financial, economic and monetary developments and policy options

Financial market developments

Ms Schnabel started her presentation by noting that, since the Governing Council’s previous monetary policy meeting on 17-18 December 2025, geopolitical uncertainty had spiked and trade policy uncertainty had rebounded briefly to summer 2025 levels. Stock market volatility had, however, edged up only slightly, far less than during previous stress episodes, while bond market volatility had hardly reacted to the risk shocks and had continued its downward trajectory. Investor risk appetite had also remained largely unaffected by the recent turbulence, and risk appetite indices for the euro area and the United States stood near their highest level since the global financial crisis of 2008.

Two factors…