European Central Bank Analysis

The ECB watch tool — market-implied ECB rate probability for every Governing Council meeting, recalculated daily

European Central Bank Analysis's next policy meeting is scheduled for 29 October 2026. The current market-implied probability of 25bp hike is 65%.

ECB Governing Council Meetings - Probability Summary

The European Central Bank's Governing Council meets every six weeks to assess monetary policy stance and economic conditions. Rate change probabilities are calculated based on EUR short term interest rate curve, as far as available. Missing data points are estimated using a Joint Least-Squares Bootstrap. These probabilities are cumulative relative to today, not independent bets placed fresh at each meeting: a given meeting's hike probability is the chance the rate is higher than today's level by that meeting date, and it already includes any move priced in for earlier meetings. A higher probability at a later meeting therefore reflects the accumulation of moves priced in over time, not a series of separate coin flips — these figures should not be added, multiplied, or compared across meetings as if each one stood alone.

Current ECB Deposit Facility Rate
2.25%
Markets price 79 bp of tightening in total — about 3.2 hikes — across the next 8 meetings.
This is the one figure that is safe to quote on its own. The per-meeting percentages below describe the same single expected path seen from different dates — they are not separate bets, and adding them across meetings double-counts the same move.
Meeting
Move at this meetingThe fresh move priced for this date alone
Rate level by this dateCumulative — already includes every move priced for earlier meetings
October 29, 2026
100.0%+30.0 bp
2.55%higher 92.4%same 7.6%lower 0.0%
December 17, 2026
61.5%+15.4 bp
2.70%higher 97.1%same 2.9%lower 0.0%
February 4, 2027
26.8%+6.7 bp
2.77%higher 97.9%same 2.2%lower 0.0%
March 18, 2027
50.2%+12.5 bp
2.90%higher 98.9%same 1.1%lower 0.0%
April 29, 2027
18.4%+4.6 bp
2.94%higher 99.1%same 0.9%lower 0.0%
June 10, 2027
16.7%+4.2 bp
2.98%higher 99.3%same 0.7%lower 0.0%
July 22, 2027
16.8%+4.2 bp
3.03%higher 99.4%same 0.6%lower 0.0%
September 9, 2027
4.9%+1.2 bp
3.04%higher 99.4%same 0.6%lower 0.0%

Where the market thinks the rate will be

Each column is one meeting; each row is a policy rate level. Darker means the market puts more weight on that level being in force after that meeting. The outlined row is today’s rate. Read down a column for one meeting’s full distribution — each column sums to 100%.

Rate
Oct 26
Dec 26
Feb 27
Mar 27
Apr 27
Jun 27
Jul 27
Sep 27
4.25%
4.00%
3.75%
1
2
2
3.50%
2
5
7
10
10
3.25%
5
15
19
22
24
24
3.00%
17
26
35
35
34
33
32
2.75%
28
50
45
34
30
26
23
23
2.50%
65
30
22
12
10
9
7
7
2.25%
8
3
2
1
1
1
1
1

Shading: share of probability on that rate level. Blank cells carry under 0.5%.

September 11, 2026

ECB Governing Council Meetings - Granular Rate Change Probabilities

Rate change probabilities are calculated based on EUR short term interest rate curve, as far as available. Missing data points are estimated using a Joint Least-Squares Bootstrap. Figures are cumulative from today, not a fresh probability at each meeting — a later meeting's probability already includes moves priced in for earlier ones.

Market Implied Rate Path

Based on EUR short-term interest rate futures. Shows where markets expect the ECB deposit facility rate to average at each future date, comparing today's expectations with those from 1 and 4 weeks ago.

Data as of September 11, 2026

Theoretical Rate Analysis & Methodology

While the empirical probabilities above show what financial markets expect (based on yield curve pricing), the theoretical rate below shows what economic models suggest the ECB should do based on current economic conditions like inflation and growth.

Comparing these helps us understand whether the market expects the ECB to follow economic theory, or if they expect the ECB to take a different path for practical reasons.

The following analysis compares market-implied rate expectations (empirical probabilities derived from EUR short term interest rates) with model-based theoretical rates calculated using the ECB's structural framework. This comparison provides insight into the market's assessment of the ECB's reaction function relative to its historical policy rule.

Current Deposit Rate
2.40%
Actual ECB Policy
Theoretical Target Rate
4.65%
Model-Based Estimate
Rate Gap
-2.25%
Actual - Theoretical
Current Policy Stance: Accommodative
Policy is below the model-implied neutral level.

Key Economic Indicators

IndicatorCurrentTarget/NeutralGap
Inflation2.80%2.00%+0.80 pp
Output Gap0.57%0.00%+0.57 pp
Unemployment6.70%N/AN/A
How these indicators become the theoretical rate:

We use a Taylor-rule style benchmark. Start with a neutral rate, add current inflation, then adjust for how far inflation is from target and whether the economy is running above or below potential.

Theoretical rate = neutral rate + inflation + 0.5 x inflation gap + 0.5 x output gap

In this table, inflation and the output gap are the two main direct inputs. Unemployment is shown as an additional cross-check for labour-market slack, which helps interpret the output-gap estimate rather than entering as a separate line in the simplified formula.

See the full Taylor Rule methodology

Policy-rule mapping: the theoretical ECB rate shown above is a policy-rule estimate derived from the indicator table using a standard Taylor-rule structure. Inflation enters both in levels and as a deviation from the target, while macro slack enters through the output-gap term.

$$i_t^* = r^* + \pi_t + 0.5(\pi_t - \pi^*) + 0.5y_t$$

Here, $r^*$ is the neutral real rate, $\pi_t$ is current inflation, $\pi^*$ is the ECB target, and $y_t$ is the output gap. Unemployment is displayed as a diagnostic slack variable alongside the output-gap estimate. Full parameter discussion is documented on the Taylor Rule methodology page.

Historical Rate Gap

Model Framework

How the Model Works:

The theoretical rate is calculated using a Taylor Rule adapted for the eurozone. It considers:

  • How far inflation is from the ECB's 2% target
  • Whether the economy is growing faster or slower than its potential
  • What a "neutral" interest rate would be (neither stimulating nor restricting growth)

When actual rates are below the theoretical rate, policy is considered "dovish" (supporting growth). When above, it's "hawkish" (fighting inflation).

Model: NAWM-Based Taylor Rule

Specification:

$$i_t^* = r^* + \pi_t + \alpha(\pi_t - \pi^*) + \beta \cdot \text{Gap}_t$$

Where: $i_t^*$ = theoretical policy rate, $r^*$ = neutral real rate (~1.0% for eurozone), $\pi_t$ = current HICP inflation, $\pi^*$ = inflation target (2.0%), $\text{Gap}_t$ = output gap estimate, $\alpha$ = 0.5 (inflation response), $\beta$ = 0.5 (output response)

Note: The ECB's actual NAWM and ECB-BASE models are more sophisticated DSGE frameworks. This simplified Taylor Rule provides a comparable benchmark consistent with the ECB's reaction function literature. For full model specifications, see the European Central Bank Economic Models page.

Data Sources & Updates

Empirical Probabilities:

  • EUR short term yield curve
  • CME FedWatch-style expanding tree methodology
  • Updated: Daily at market close

Economic Indicators:

  • Eurostat (HICP inflation, GDP)
  • ECB Statistical Data Warehouse
  • OECD Economic Outlook (output gap)
  • Updated: Monthly with data releases
Want to Learn More About ECB Models?

Explore detailed specifications of NAWM, ECB-BASE, and other frameworks

View European Central Bank Economic Models

Validation: Model outputs are continuously compared against ECB staff projections and consensus forecasts from major institutions (Bloomberg, Reuters surveys).

European Central Bank News & Announcements

Last updated: September 11, 2026
European Central Bank probabilities could not be refreshed in the latest update — an automated data-quality check withheld new figures (e.g. an out-of-tolerance futures decomposition). The values shown are the most recent reliable estimates and may be outdated; interpret them with caution.

Frequently Asked Questions

The ECB rate probability — the market-implied likelihood of a Governing Council rate hike, cut, or hold at the next meeting — is shown live on this page, broken out by meeting date. Unlike trackers that refresh a few times a day from cached values, these odds are recalculated from same-day EUR interest rate futures data.

Central Bank Watch calculates market-implied ECB rate change probabilities using EUR short-term interest rate futures. These probabilities show the market's expectation for rate hikes, cuts, or holds at each upcoming ECB Governing Council meeting. Missing data points are estimated using a Joint Least-Squares Bootstrap.

The ECB Governing Council meets every six weeks to set interest rates. The next meeting date is displayed on this page with a live countdown timer showing the exact time remaining until the rate announcement.

The current ECB deposit facility rate is displayed in real-time on this page. The ECB sets three key rates: the deposit facility rate, the main refinancing operations rate, and the marginal lending facility rate.

ECB rate change probabilities are derived from EUR short-term interest rate futures using an expanding tree methodology. Where market data is insufficient, a Joint Least-Squares Bootstrap estimates the missing points. This provides a market-consensus view of expected ECB policy changes.

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