ECB’s Müller Says Market Pricing for Steady Rates “for the Next Few Quarters” Is Justified

19 December 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Madis Müller on Friday said investors were justified in expecting ECB interest rates to remain unchanged over the coming quarters.

In a blog post on the website of Eesti Pank, which he heads, Müller wrote that “investors' expectations, expressed through their transactions in the financial markets,” that rates “may remain at their current levels for the next few quarters are justified.”

The Governing Council “unanimously concluded that there is no reason to change euro area interest rates at this time,” he said with respect to yesterday’s decision to leave rates unchanged.

Müller nonetheless struck a somewhat more upbeat tone on activity, writing that there was “reason to be a little more optimistic about the economic outlook than a few months ago.” Inflation, he added, was expected to remain “close enough to the 2% target until 2028.”

Müller also cited stronger-than-anticipated euro area corporate investment in the third quarter, attributing it to lower interest rates and reduced uncertainty.

Competitiveness concerns still weighed on the outlook, he wrote, citing European industry’s declining market share in key export markets. He pointed to sharply higher tariffs holding back sales to the U.S. market and “aggressive” competition from Chinese manufacturers elsewhere.

Given those constraints, Müller wrote that domestic demand—consumption along with corporate and government investment—would be the main growth engine over the next few years.