At a time when economic uncertainty looms, the European Central Bank remains steadfast and reiterates its commitment to making decisions based on data as planned.

The European Central Bank announced on Thursday that it would maintain the deposit facility rate at 2%, in line with market expectations. The ECB did not provide guidance on future decisions, reiterating that it will make decisions based on the information received at each meeting. The ECB's Governing Council stated in a statement on Thursday, "The upside risks to inflation and the downside risks to growth have intensified. The Governing Council remains in a good position to deal with the current uncertainty." Since the outbreak of the war, European Central Bank policymakers have consistently emphasized that they will take decisive action if there are signs of spiraling inflation. However, the data so far has not convinced them to take action. The ECB is not the only central bank that is maintaining a wait-and-see approach. The Federal Reserve kept rates unchanged on Wednesday, and the Bank of England also decided to hold steady on Thursday. The ECB is also concerned about the impact of the war on output. Data released shortly before the rate decision showed that GDP in the euro area grew by only 0.1% in the first quarter, lower than expected, heightening market concerns about stagflation. Policymakers have stated that more time is needed to assess the extent of the economic impact of the Middle East war. Market participants believe that ECB officials will focus on price increases driven by rising energy costs. In April, inflation in the eurozone surged to 3%, the fastest pace since autumn 2023. Traders currently expect the ECB to raise rates by a cumulative 75 basis points by the end of this year. After the ECB statement was released, traders bet on no change, while bond yields maintained earlier gains. The yield on German two-year government bonds fell by 9 basis points to 2.65%. The euro against the US dollar continued to rise, up by 0.2% to 1.1694. Ahead of this week's meeting, ECB policymakers expressed concerns that the ongoing two-month war in the Middle East and the continued blockage of the Hormuz Strait have left the euro area oscillating between the ECB's baseline forecasts and the more pessimistic expectations seen in March. It is reported that the baseline scenario assumes an average oil price of $81.3 per barrel in 2026, while the adverse scenario predicts that Brent crude oil will approach $120 per barrel this quarter. Data shows that international oil prices briefly exceeded $126 per barrel earlier on Thursday, reaching a four-year high. Furthermore, ECB officials will receive new forecasts in June. Economists and investors expect that they will choose to raise interest rates at that time. By then, the uncertainty surrounding the duration of the Middle East conflict and its economic impact may have dissipated. Currently, the debate continues between the US and Iran over whether the reopening of the Hormuz Strait is a precondition for a peace agreement or an eventual outcome. According to earlier reports, the US has received a new negotiation proposal from Iran through Pakistan. However, there are indications that President Trump and his national security team discussed the proposal, and "Trump does not like the proposal." A US official indicated that Trump is dissatisfied with Iran's negotiation proposal because it does not address Iran's nuclear program. Sources close to the mediation effort in Pakistan state that efforts to bridge the gap between the US and Iran have never stopped, but hopes for a resumption of peace efforts are fading. At the same time, a US official stated that Trump has instructed aides to prepare for a long-term blockade against Iran, aiming to cut off sources of funding for the Iranian regime in a high-risk manner to pressure Iran into making concessions on its long-standing nuclear issues. The official stated that in recent meetings, Trump decided to continue increasing pressure on the Iranian economy and oil exports by blocking ships from entering and leaving Iranian ports. He believes that maintaining the blockade carries lower risks compared to resuming airstrikes or directly engaging in conflict. Iran, on the other hand, hopes that lifting the maritime blockade will serve as a precondition for further negotiations or the reopening of the Hormuz Strait. According to the latest reports, the US military will report to Trump on the latest plan to target Iran on April 30 Eastern time. Reportedly, a new plan prepared by the US Central Command is to launch a "rapid and powerful" strike against Iran, with likely targets including Iran's infrastructure. The Central Command has submitted an application to deploy the "Dark Eagle" hypersonic missile to the Middle East. If approved, this would be the first deployment of hypersonic missiles in a combat zone by the US, potentially used to target Iran's ballistic missile launch sites. Analysts point out that although the US and Iran have been in a temporary ceasefire since April 9, the US's actions indicate that it is still preparing for possible military strikes. Both the US and Iran are using the ceasefire period to reorganize their forces, potentially leading to more intense conflicts in the future. If the situation escalates and exacerbates the already severe global interruption of oil supply, a further increase in oil prices could exacerbate the eurozone's stagflation risk and lead policymakers into a policy dilemma of "suppressing inflation or stabilizing growth."