The ECB Raised Rates Against Wages That Have Not Moved Yet

By EC Assets · Published 11 September 2026 · Updated 11 September 2026

Central banks cannot fight an energy shock. Thursday's hike was never about one.

The ECB raised its deposit rate to 2.50% in Berlin, the second increase this year, effective 16 September (ECB). Markets had priced it fully. LSEG data put the probability at 100%.

A move that surprises nobody moves nothing. What matters is the reasoning behind it.

Headline inflation reached 3.3% in August. Energy prices rose 14.3% year on year. Core inflation eased to 2.4%, with services slowing (ECB). Wage growth is decelerating.

Read that again. The ECB tightened while the part of inflation it can actually influence was falling.

The textbook says look through a supply shock. The Governing Council chose not to, and the projections explain why: 3.0% this year, 2.5% in 2027, 2.1% in 2028. Above target for three years. Long enough for energy costs to seep into wages and contracts.

This is a hike against second-round effects that have not appeared yet. Insurance, priced by the memory of 2022.

Here is what many allocators overlook: the deposit rate now sits at the upper end of what the ECB calls neutral. Every step from here restricts. And the bank has said it is not pre-committing to any path.

That leaves the market holding the distribution. Bund yields reportedly near their highest since 2011 are one expression of it.

At EC Assets, we treat a central bank without forward guidance as a source of implied volatility, not a forecast.

A supply shock sets the price. The central bank sets the cost of being wrong about it.