ECB's Vujcic says the central bank has started a tightening cycle

The remark follows two rate increases this year and comes as traders price in several more through 2027.

ECB Governing Council member Boris Vujcic said the central bank has started a tightening cycle, confirming a shift that markets had already begun to price in.

The ECB raised its policy rate from 2.0% to 2.50% in two steps, in June and September 2026, a pace Vujcic said was worth maintaining "for the time being," according to Reuters. On September 18, money markets were pricing three or four more hikes by the end of 2027, with the next possibly coming as soon as October, a move that would take the deposit rate to between 3.25% and 3.50%, Reuters reported. Bloomberg reported on September 10 that ECB officials, citing people familiar with the matter, expected further tightening with an October increase in play.

The tightening comes as the ECB's leadership is set to change. Isabel Schnabel will step down from the ECB board on January 3, 2027, before her eight-year term ends, to take a senior role at the IMF.

Vujcic's confirmation aligns with the ECB's recent hawkish tone and matches what markets have already priced in: four quarter-point hikes through 2027. For investors, that means little has changed. Other officials have been signalling the same direction in recent weeks, and at least one major bank has already pencilled in hikes for December and March.