European Central Bank executive board member Schnabel clarified, "Not lowering interest rates does not mean that interest rates should be raised. It is expected that interest rates will not be raised in the foreseeable future."

Isabel Schnabel, member of the Executive Board of the European Central Bank, said that she does not expect interest rates to be raised for a period of time. After Schnabel's recent comments led investors to increase bets on rising borrowing costs next year, she clarified that she did not say that a rate hike should be implemented. In a podcast released on Monday in the "Frankfurt Report," Schnabel stated: "Currently, there are no expectations of a rate hike in the foreseeable future. Unless unforeseen events occur, interest rates are likely to remain stable for a considerable period of time." Schnabel's remarks come after global markets have repriced for a tighter monetary policy. In early December, she had expressed confidence that investors betting on the European Central Bank's next rate action being a rate hike were "quite confident." Schnabel stated that consumer spending, business investment, and significant increases in government spending on defense and infrastructure will support the economy, even though borrowing costs are at an appropriate level for "a period of time" (unless further shocks occur). These comments triggered market adjustments. Schnabel's confidence stems from Europe's strong performance in dealing with the tariff turmoil sparked by US President Donald Trump. Consumers have benefited from rapid wage growth and near historical low unemployment rates. At the same time, favorable financing conditions and a surge in the adoption of artificial intelligence technology have boosted investment. Officials have hinted that they are satisfied with the current level of interest rates, considering it to be the optimal level as inflation has returned to its 2% target and the economies of the euro area's 20 countries, although growing slowly, are still expanding. According to sources, policymakers privately believe that the rate-cutting cycle may have already ended. Schnabel emphasized: "I did not say that interest rates should be raised. I said that they should not be cut again. This is a very important distinction." Last Thursday, the European Central Bank announced that it is keeping its key policy rates unchanged and expressed a more positive outlook on the euro area economy, believing that the euro area economy is showing resilience in the face of global trade shocks and escalating geopolitical uncertainties. In terms of monetary policy communication, ECB President Lagarde clearly stated that in the current highly uncertain environment, the ECB cannot provide forward guidance. She pointed out that whether it is geo-political risks, changes in the global trade landscape, or trade and capacity issues near the European borders, the future path is full of uncertainties, and the central bank can only adhere to a "meeting-by-meeting, data-dependent" decision-making approach. She stated that the rate decision was passed unanimously, and the committee unanimously believes that the current policy stance is "appropriate," but this does not mean that the policy path is set in stone. All policy options will remain available, and future rate adjustments will not be set on a fixed path or timetable.