This paper assesses the ECB’s monetary policy stance and communication amid declining inflation, persistent uncertainty, and renewed external risks. It documents how trade-policy shocks and global spillovers affect inflation surprises, highlights substantial cross-country inflation heterogeneity within the euro area, and shows that common shocks generate uneven national responses. Using a novel multi-agent LLM framework, it evaluates ECB communication, revealing strengths during active policy adjustments but gaps in addressing inflation dispersion and uncertainty communication. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 26 February 2026. Source : © European Union, 2026 - EP Read more