- Inflation is still high, underlying dynamics remain strong
- The uncertainty around its path ahead has increased
- We must and we will bring down inflation to target
- Recent tensions have added new downside risks
- That has made the risk assessment blurrier
As mentioned earlier this week, the ECB has went from "we are going to keep hiking rates further" to "we cannot confirm nor deny anything about future rate hikes". The situation is all very fluid and if financial conditions improve before their May meeting, they might just go with a 25 bps rate hike as the next step.