The easing cycle that started in 2001 has not been reversed yet and the ECB has kept the policy rate constant at 2% since June 2003. During this period, the ECB has stressed that its policy assessment is conditional to macroeconomic conditions and this seems to be well understood by the markets.
Changes in economic conditions and concomitantly in the ECB’s assessment of these conditions and their implications for the prospects, and the associated risks, for economic activity and inflation have allowed market participants to read signals about future changes in the policy rate.