The European Central Bank raised its key rate from 2.25% to 2.50%, its second increase of 2026, and policymakers signaled that further tightening remains possible if war-fuelled energy costs lift broader euro-area inflation. Bundesbank President Joachim Nagel said rates may need to enter mildly restrictive territory, while Estonia's Ulo Kaasik and Slovenia's Primoz Dolenc warned that higher fuel, gas and electricity prices could intensify inflation pressure in the autumn and winter. Money markets have priced at least three additional ECB increases over the next year. The decision widened the yield gap between the Eurosystem's 2.50% deposit facility rate and the zero yield permitted for holders of regulated euro stablecoins under the European Union's Markets in Crypto-Assets regulation, or MiCA.