European Central Banks Hold Rates Despite Cooling Inflation

European central banks are holding rates steady even as inflation continues to cool, signaling a preference for caution over speed. Both the ECB and the Bank of England appear focused on labor market dynamics and second-round inflation risks rather than headline CPI alone. Seems the result is a policy pause that keeps financial conditions tight despite improving data. European Central Banks Hold Rates Despite Cooling Inflation | Sandmark

What stands out to me isn’t that they’re holding rates, it’s why. This feels less about the current inflation prints and more about protecting institutional credibility after years of being accused of reacting too late. From that perspective, waiting too long is a reputationally safer mistake than cutting early and having to reverse course. It leaves markets in limbo, but it’s consistent with how central banks tend to manage risk when trust is the real constraint. Curious how others take it?