By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Friday said he could understand why markets were pricing in two rate hikes this year, but stressed that policymakers remained guided by incoming evidence rather than any pre-set course.

Makhlouf, who heads the Central Bank of Ireland, said in an interview with Bloomberg that investors were right to focus on the ECB’s determination to return inflation to target, but that the Governing Council was not committing itself in advance.

“I can well understand why they’ve assumed that,” he said of market pricing. “But we have no predetermined path.”

Asked whether he agreed with Bundesbank President Joachim Nagel that the ECB might need to consider raising rates as soon as next month, Makhlouf said action would depend entirely on how the data evolved before the April meeting.

“If the facts point to us having to take action, we’re going to absolutely take action,” he said. “But in the end, it depends on the evidence.”

He emphasized that six weeks was “a very long time” in the life of the current shock and said policymakers needed to keep “a very close eye on the data, on the facts, on what’s happening” before deciding what to do next.

Makhlouf also said the April meeting was unquestionably in play, though he argued that this was consistent with the ECB’s existing reaction function rather than a new shift in posture. “The next meeting is a live meeting, definitely,” he said.

At the same time, he pushed back against the idea that the ECB had adopted a tightening bias. “No, I don’t think the ECB has got a tightening bias,” he said, adding that his own approach remained to take a “calm, careful, considered” view of the evidence while staying “absolutely determined” to deliver 2% inflation over the medium term.

On market pricing, Makhlouf said the assumptions were understandable in light of that determination, but again declined to validate any particular path. “The only thing that we’re absolutely determined on is achieving our 2% target,” he said.

He also stopped short of declaring rate cuts permanently off the table, arguing that the outlook was too fluid for such commitments. Before the latest shock, he said, he had viewed policy as “basically at neutral,” but recent developments had changed the picture and could change again quickly.