The European Central Bank just made its position clear: fancy tools are out, textbook monetary policy is back in.
On June 11, 2026, the ECB’s Governing Council raised its three key interest rates by 25 basis points. The move came after euro area inflation climbed to 3.2% in May, up from 3.0% in April, with energy prices surging more than 10% and doing most of the heavy lifting on the upside.
President Christine Lagarde framed the decision as a return to fundamentals. A more resilient European economy, she argued, allows the central bank to stabilize prices using the tools it was designed to use, primarily interest rate adjustments, rather than the unconventional measures that defined the crisis years.
What the numbers actually say
The ECB’s June 2026 staff projections paint a measured but cautious picture. Overall inflation is expected to average 3.0% for the full year before gradually declining. The target: 2.0% by 2028.
