Ms Schnabel started her presentation by noting that the narrative in financial markets remained unstable. Since January 2025 market sentiment had swung from strong confidence in US exceptionalism to expectations of a global recession that had prevailed around the time of the Governing Council’s previous monetary policy meeting on 16-17 April, and then back to investor optimism. These developments had been mirrored by sharp swings in euro area asset markets, which had now more than recovered from the shock triggered by the US tariff announcement on 2 April. On the back of these developments, market-based measures of ... (full story)