By David Barwick – FRANKFURT (Econostream) – We argued on March 27 that European Central Bank Executive Board member Isabel Schnabel had given the Governing Council “room to wait.” On April 1 we said April 30 still looked live, but that it sounded “less and less like the ECB is trying to lead markets there,” a point we sharpened further on April 7 and April 8. President Christine Lagarde’s Bloomberg TV interview on Tuesday strongly reinforces that line.

Asked whether there was a tightening bias at the ECB, Lagarde answered, “No.” She insisted that the ECB had to be “agile” and “ready” to move as needed, while stressing that nothing at present predetermined a move in one direction or the other. Clearly, guiding markets toward an April hike would sound different.

Our skepticism regarding an April move thus seems vindicated; Lagarde has now all but said outright what recent communication has increasingly implied: April remains formally live, but the ECB is not in the process of building a rhetorical case for action at that meeting—on the contrary.

That however does not make the interview an example of good communication. Actually, it looks more like a genuine communications mistake.

The problem is that Lagarde did not merely refuse to pre-commit to an April hike, but instead went further and denied any hiking bias at all. Other parts of the same interview undermine that. Most obviously, she said the euro area was now “somewhere in between the baseline and the adverse scenario.”

While her admission that the shock has pushed the economy away from the central case and toward a less favorable one does not by itself compel immediate tightening, it makes it difficult to argue that the directional distribution of risks is flat. April may still be more likely to bring a hold than a hike, but that is not tantamount to saying the next move is as likely to be down as up.

Indeed, Lagarde herself laid out a reaction function that points the other way. If the shock proves short-lived, it can largely be seen through. If it proves more lasting, peaks higher, and generates indirect or secondary effects, then action may be required. If it lands somewhere in between, judgment is needed. That is a sensible framework, but not a symmetric one. It leaves the ECB watching for persistence, propagation and de-anchoring of expectations, not for some obvious path to easier policy.

The rejection of a tightening bias therefore goes too far. It conflates two different claims: that there is no preset April move, and that there is no meaningful upward skew in the reaction function. It is easy to believe the first. The second, much less.

Even Banque de France Governor François Villeroy de Galhau said on April 2 that the ECB’s next move was very likely to be an increase, though he stressed that it was too early to say when rates could rise. Though late in coming, that was a more coherent formulation than Lagarde’s. It acknowledged the directional asymmetry without pretending that the timing was already settled.

The contrast is all the more striking because Lagarde explicitly reminded viewers that the ECB’s baseline and scenarios are built using market assumptions for monetary and fiscal policy. That should have led her toward greater discipline, not less. Once one invokes that framework, it is odd to say in the same breath that the economy has moved away from baseline toward the adverse case, yet leave the impression that cuts remain just as live as hikes.

Lagarde is hardly alone in wanting to preserve optionality. Bank of Finland Governor Olli Rehn said today that the medium-term inflation effect of the war remained unclear and that rate decisions were not locked in beforehand. Croatian National Bank Governor Boris Vujčić said only yesterday that energy prices were still closest to the ECB’s baseline. The Council is clearly still feeling its way through a fast-moving shock.

But that only underscores the importance of precision that Lagarde neglected. There was no need for her to deny the obvious directional asymmetry. She could have rejected any preset April hike while still acknowledging that the shock makes the next move more plausibly up than down. By denying even that much, Lagarde made the Governing Council sound more two-sided than her own description of events justifies.

So yes, her interview strengthens the case for an April hold. In that respect, it is useful, even clarifying. But it also suggests that in trying so hard to deny any predisposition to tighten, she overshot and muddied a reality that should not be hard to state: April is likely a hold, but the next move still looks more likely to be up than down.

If her rejection of a tightening bias was meant to sound dovish, it was “dumbish.” If it was meant to sound balanced, it was careless.