ECB Insight: Kocher Reminds the ECB What “Meeting-by-Meeting” Actually Means

13 January 2026

By David Barwick – FRANKFURT (Econostream) – Over two days, the European Central Bank’s Governing Council offered a small but telling communications split: two senior national central bank governors drifted into calendar-based reassurance about rate hikes, while their colleague, Austrian National Bank Governor Martin Kocher, reaffirmed the ECB’s doctrine of optionality.

In an interview on Monday with Estonian radio Äripäev, Eesti Pank Governor Madis Müller framed any future rate increases as an issue for “a few years ahead,” not something to expect “in the coming months or quarters.”

In his annual New Year address the same day, Banque de France Governor François Villeroy de Galhau dismissed the prospect of a hike this year as a “fanciful theory,” at least “barring an unlikely shock.”

In contrast, Kocher, asked explicitly by Econostream on Tuesday whether he agreed with those assessments, declined to endorse either line and instead restated the only position that is fully consistent with the ECB’s declared operating principles: “I think we agreed on no precommitments for any rate decisions.”

The ECB has spent years trying to rebuild credibility around a simple proposition: in a high-uncertainty world, monetary policy cannot be credibly run on calendar promises. The official script has therefore emphasized a data-dependent, meeting-by-meeting approach and an aversion to pre-committing to any particular future rate path.

Against that standard, what Müller and Villeroy were doing on Monday was, functionally, soft forward guidance. It may have been offered with caveats, but the effect is directional: it encourages markets to treat hikes as a remote scenario for 2026.

Start with Müller. He did not merely offer a baseline projection; he set a horizon. Any hike, he suggested, was for “a few years ahead,” not “the coming months or quarters.”

Müller is not speaking in a vacuum. He is a candidate for the ECB vice presidency, a post that will become vacant when Luis de Guindos’ term ends on May 31.

In that context, it is reasonable to read the “years, not months” framing as serving a political objective as much as a macro one: reassure the more rate-sensitive parts of the euro area that elevating a perceived hawk would not mean a sudden hawkish shift in the ECB’s center of gravity.

Put differently, Müller can be hawkish on the inflation narrative, but he cannot afford to look like a hawk on the institutional trajectory while auditioning for the number-two job.

Villeroy’s motivations are easier to parse because they are so consistent with his public persona. He has long supported easier money at the margin and has a well-established habit of pushing beyond the consensus message, in part to remain a first-tier voice in the pan-European debate. His choice on Monday again favored salience over discipline.

To be sure, he backed the claim with a shopping list of disinflationary considerations—underlying inflation at 2.3%, wage moderation, “low-cost Chinese imports,” and even the possibility of a weaker dollar if Fed independence were challenged.

But the economic argument is not the main issue here. The communications error is.

When a senior Governing Council member says hikes this year are essentially a misconception, the statement is not processed by markets as an individual’s conditional forecast. It is processed as a quasi-institutional signal about the Council’s reaction function.

That is exactly what the ECB is trying to avoid.

The meeting-by-meeting framework exists to preserve policy optionality under uncertainty. Yet calendar-based reassurance narrows the perceived distribution of outcomes and creates three avoidable problems.

First, it encourages overconfidence in one branch of the tree. A shock can always justify deviating from a baseline; the problem with calendar reassurance is that it narrows the perceived distribution of outcomes, so that when the shock arrives the ECB is forced into a larger expectation reset and an avoidable “why were you so certain?” debate about its prior messaging.

Second, it hardens market priors. If circumstances later require a less accommodative stance, the ECB must tighten against expectations it helped entrench, raising the odds that a justified move is received as a “surprise” rather than a conditional response.

Third, it blurs process and preference. Markets cannot easily distinguish whether such statements represent a collective baseline or an individual’s advocacy, particularly when the language shifts from probabilistic to declarative (“misconception,” “fanciful theory”).

Kocher’s intervention on Tuesday was therefore not just defensible. His rejection of calendar guidance was corrective, and he anchored the point in the only argument that matters for the ECB’s current framework: uncertainty.

“Uncertainty levels are high; we don't know what's going to happen,” he said, noting that “events unfolding already on the first 13 days of this year… might have an effect on economic developments, on inflation.”

Finally, and crucially, he compressed the horizon. He did not debate whether hikes are plausible in 2026. He emphasized that the ECB cannot responsibly talk with confidence even about the next few meetings: “I’m strongly committed to this… meeting-by-meeting approach… and that means we don't know what's going to happen during the next couple of months on the interest rates.”

This is the “doubly right” aspect. Kocher refused to validate the forward guidance, and he reminded markets why it is structurally misguided to seek it.

The episode also hints at a broader risk: succession politics bleeding into the reaction function.

Müller’s vice presidential candidacy makes any reassurance about “no hawkish turn” politically legible, especially to Southern member states that worry about the distributional consequences of tight policy. But once candidates begin signaling “don’t worry, I won’t be that kind of hawk,” monetary policy communication starts to resemble coalition management.

That dynamic can quickly become corrosive. Dovish constituencies will discount reassurance as ambition. Hawkish constituencies will feel pressure to counter-signal. The net result is not clarity, but a Council that appears to trade in narrative positioning rather than disciplined conditionality.

Kocher’s approach avoids that trap by staying inside the ECB’s own declared guardrails: data dependence, meeting-by-meeting decisions and no pre-commitment.

In a period when the ECB is trying to preserve credibility and flexibility simultaneously, Kocher offered a simple service to the institution. He treated uncertainty as a constraint, not an inconvenience.