Lagarde to Exit ECB Early on Feb. 7, 2027, Citing Loss of Neutrality; Rates Held at 2.5%

European Central Bank President Christine Lagarde said she will step down on Feb. 7, 2027, about nine months before her term ends, declaring she can no longer remain neutral. "I don't think that I can remain neutral," she told reporters in Frankfurt, adding the neutrality expected of central bankers was no longer something she could accept. Minutes after the ECB left its key rates unchanged, with the deposit rate at 2.5%, Lagarde said policymakers had debated a hike instead. The hold was unanimous, but she signaled the pause may last only until December, listing two inflation readings, third-quarter growth and wage data as inputs. Eurozone inflation rose to 3.8% in September, with energy prices up 18.9% year over year, while the average 10-year government bond yield has climbed about 35 basis points since the September projections' cut-off. Lagarde did not name France, whose 10-year yield eased to about 4.88% on Thursday, roughly 154 basis points above Germany's, but said high-debt countries must plan for rates that "will probably remain higher for a period of time." She said the ECB has instruments to respond should market moves threaten monetary policy transmission.