Olli Rehn, a member of the European Central Bank’s Governing Council, stated that the ECB currently sees no need to activate the Transmission Protection Instrument (TPI). This emergency bond-buying mechanism was established on July 21, 2022, to stabilize bond markets, but it has never been utilized since its inception.
The TPI allows the ECB to purchase public-sector securities on secondary markets if financing conditions in eurozone countries deviate from economic fundamentals. To qualify for support, nations must adhere to EU fiscal rules and governance criteria. The ECB currently reports no fragmentation risks that would necessitate the use of this tool.
The announcement coincides with the ECB's decision to increase key interest rates by 25 basis points, effective September 10, 2026. This adjustment sets the deposit facility rate at 2.50%. The bank maintains a data-dependent policy approach, with future decisions contingent on inflation, employment, and geopolitical developments.
ECB staff projections estimate average headline inflation at 3.0% for 2026, with a projected decline to 2.5% in 2027 and 2.1% in 2028. The central bank emphasizes that it is not pre-committing to a specific policy path, as ongoing geopolitical tensions continue to influence the economic outlook.
