ECB's Nagel says that markets see a more than 95% chance of a September rate hike; markets understand rather well, the ECB's way of reacting

In past episodes of this kind, confirmation of near-certain pricing has tended to matter less at the front end, which is already there, and more through what it implies about the sequencing beyond the next meeting: whether the move is framed as one-and-done or the continuation of a hiking cycle determines the belly and longer maturities rather than the immediate policy date. Nagel has historically sat at the hawkish end of the council, so alignment between his framing and market pricing narrows the distribution of dissent rather than revealing new intent. The phrase about markets understanding the reaction function is the operative part: it shifts weight onto incoming data prints, since each release then feeds directly into rate expectations without officials needing to steer. The follow-ons are whether other council members echo the endorsement or qualify it, and how the data calendar between now and the meeting is treated by speakers in the interim.