Market sentiment is shifting dramatically — traders now see over 50% odds that the European Central Bank will raise rates by 2026. This recalibration comes on the heels of Isabel Schnabel's hawkish comments earlier this week, which clearly struck a nerve across trading desks.

Schnabel, a key voice on the ECB's executive board, signaled a notably firmer stance on inflation control. Her remarks haven't just caused a ripple — they've triggered a fundamental reassessment of the monetary policy trajectory. Rate futures are pricing in scenarios that seemed unlikely just days ago.

What's particularly interesting here is the speed of this repricing. When a central bank official of Schnabel's stature speaks, markets listen. And right now, they're hearing a message that tighter policy might stick around longer than the dovish consensus anticipated.

For risk assets — including crypto — this matters. Higher rates typically strengthen fiat currencies and can pull capital away from speculative positions. The 2026 timeline gives markets breathing room, but the direction of travel is what's catching attention.