European Central Bank’s Radev warns against predetermined rate path

Dimitar Radev, the Governor of the Bulgarian National Bank and a member of the ECB Governing Council, is pushing back against any market expectation that the European Central Bank has locked itself into a predictable interest rate trajectory. His message is simple: past rate hikes do not dictate future ones, and the ECB intends to let the data do the talking. The warning comes after the ECB raised rates in June and September 2026, its first tightening cycle since 2023. Those moves were driven by inflation climbing above 3%, fueled in part by higher energy prices linked to geopolitical tensions in the Middle East. Data over dogma In earlier remarks from January 2026, Radev described the ECB’s interest rates at the time, around 2.5%, as appropriate given the prevailing inflation picture. He specifically noted that rate hikes would only be warranted if there was clear evidence of “entrenched inflation persistence,” particularly in services and wages. By August 2026, Radev had flagged the October and December Governing Council meetings as potential windows for additional policy action. The inflation math ECB staff projections from September 2026 paint a picture of inflation gradually d...