By Marta Vilar – MADRID (Econostream) – Econostream’s ECB Tone Meter continued to decline this week, building on last week’s reversal from earlier hawkish levels. The Governing Council index has now slipped back into neutral territory, sitting just below the threshold that would signal a slightly hawkish stance.
The Governing Council index declined to +0.44 from +0.55, while the Executive Board index fell to +0.14 from +0.27, both now within neutral territory.
During the week, several policymakers explicitly supported keeping interest rates unchanged at the April 30 meeting. Others emphasized a cautious approach, urging the ECB to remain “prudent” and “keep a cool head.”
Biggest Movers of the Week: Lagarde, de Guindos, Stournaras and Šimkus
Following last week’s remark that there is no tightening bias, ECB President Christine Lagarde further reinforced a patient stance. She highlighted that uncertainty surrounding the current shock “argues for gathering more information before drawing firm conclusions for our monetary policy.”
ECB Vice President Luis de Guindos echoed this view, saying that monetary policy “must be prudent” and maintain a “cool head.”
More direct calls to hold rates came from Bank of Greece Governor Yannis Stournaras and Bank of Lithuania Governor Gediminas Šimkus. Stournaras stated the ECB “should wait” before raising rates and even suggested that the war could end “sooner rather than later.” Šimkus took an even firmer stance, arguing that the ECB “really shouldn’t” hike rates in April.
Dominant Themes in This Week’s Communication: More Clarity About April Hold
Overall, policymakers this week appeared more inclined to signal that an April hold is on the table. Beyond those already mentioned, Latvijas Banka Governor Mārtiņš Kazāks emphasized that the ECB is “not in a rush” to raise rates and retains “the luxury of collecting data and forming our view.”
ECB Chief Economist Philip Lane also reinforced the case for patience, stating that recent developments have not materially altered the outlook established at the March meeting or the balance between baseline and adverse scenarios.