ECB: Meeting of 29-30 January 2025 Account of the monetary policy meeting of the Governing Council of the European Central Bank

February 27, 2025-- Held in Frankfurt am Main on Wednesday and Thursday, 29-30 January 2025
1. Review of financial, economic and monetary developments and policy options Financial market developments
Ms Schnabel noted that the financial market developments observed in the euro area after October 2024 had reversed since the Governing Council's previous monetary policy meeting on 11-12 December 2024.

The US presidential election in November had initially led to lower euro area bond yields and equity prices.

Since the December monetary policy meeting, however, both risk-free yields and risk asset prices had moved substantially higher and had more than made up their previous declines. A less gloomy domestic macroeconomic outlook and an increase in the market's outlook for inflation in the euro area on the back of higher energy prices had led investors to expect the ECB to proceed with a more gradual rate easing path.

A bounce-back of euro area risk appetite had supported equity and corporate bond prices and had contained sovereign bond spreads. While the euro had also rebounded recently against the US dollar, it remained significantly weaker than before the US election.

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Source: ECB