By David Barwick – FRANKFURT (Econostream) – The Insight we published on April 1 argued that European Central Bank Governing Council communication had lately grown distinctly more tentative. Austrian National Bank Governor Martin Kocher’s Politico interview on April 2 lets us make the point more plainly: as things stand today, the burden of proof at the April meeting lies with a hike, not a hold.

Kocher did not close the door to action, asserting that if the Middle East conflict continued, “it is clear that the monetary policy stance will be affected,” and warning that some recent price increases had exceeded what the baseline assumed.

What warrants more attention is this comment: “Nobody wants to raise rates. It would hit an economy that is not growing strongly anyway.”

With that, he bluntly highlighted the hesitancy that pervades much of the ECB’s recent communication. The Council is preserving the option to move in April if the evidence demands it, without regarding a move as the default. Kocher’s formulation goes further: a hike remains possible, but would need to be warranted clearly enough to overcome reluctance.

His other comments fit. Kocher said it was too early to know whether sufficient evidence would be available by the April 30 meeting. He stressed that the ECB could “react quickly or give ourselves some time,” depending on the signals it received. For that reason, he said, it made sense to have “a steady hand.”

Anticipation of a move at month's end would look different. Kocher is instead indicating that action that soon is contingent on a materially stronger case.

Dutch National Bank Governor Olaf Sleijpen, in a podcast aired Saturday, pointed in much the same direction. While conceding that the April discussion would likely be about whether rates stay the same or go up, he noted that there would be new data by then, “but that is limited.” That, too, suggests that the evidentiary basis for early action may still be thin.

Bank of Greece Governor Yannis Stournaras, speaking on Monday, also framed the issue in conditional terms. A short-lived energy shock could be “looked through,” but if it proved “stronger and more persistent,” affecting medium-term inflation expectations and wage developments, then “a tighter monetary policy stance is to be expected,” he said. That is less an argument for moving already in April than a reminder of what would have to happen for a stronger case to emerge.

Nor did the three other Council members besides Kocher who made relevant comments on the eve of the Easter holidays alter that picture. Bank of Lithuania Governor Gediminas Šimkus said it was “definitely too early” to generalize about whether action would already be required in April, warned that “caution is needed,” and said whatever he might say now could look very different by the end of the month.

Again, that sounds less like convergence on a hike than like a preference to wait-and-see for now unless the facts worsen.

Banca d’Italia Governor Fabio Panetta and Banque de France Governor François Villeroy de Galhau both indicated that the baseline now looked too favorable, but stopped short of calling for immediate tightening. Villeroy said it was “far too early to predict” the date of ECB action and—shades of Kocher—called for “avoiding overreacting to a shock that is, in any case, already slowing down the economy.”

Of course, Šimkus, Panetta and Villeroy are all doves who would be less inclined than the average Council member to front-run tightening. That makes the remarks of a moderate hawk like Kocher all the more striking: for all his recognition that policy may yet have to respond, he still frames a hike as something “[n]obody wants” in an economy that is already weak. His bar is high rather than neutral.

The message of our April 1 Insight looks a shade stronger now. It is still true that April 30 remains live and that the ECB wants genuine optionality. But the burden of proof does not look evenly distributed between the two choices. Rather, a hold appears to be the default option.

A hike would require further evidence that argues fairly strongly for not waiting: clearer signs that the shock is proving persistent, that it is spreading beyond energy into broader pricing behavior, or that medium-term inflation expectations are beginning to shift in a way the ECB cannot comfortably ignore.

That does not make April a dead meeting. It does mean that the case for action still has to be made. Judging by the direction of public communication, the Governing Council still sounds more inclined to wait for that case to become compelling than to move before it does.