Mario Draghi, perhaps one of the most relaxed central-bank communicators in recent years, can stumble over his lines for once without anyone really losing the plot.
On Thursday, the European Central Bank president found himself with an undeniably difficult task: be upbeat about the obviously firming euro-area recovery, without giving a signal that monetary policy is about to become less supportive before that moment has come.
And as if in recognition of the difficulty of trying to say two things at once, Draghi had to pause at least twice while answering questions to consult his written notes and gather his line of argument. The message, somehow, remained clear.
The upshot is that the ECB kept rates and stimulus settings on hold, and stuck to its "forward guidance" that interest rates will stay low, or lower, beyond the end of the current asset-purchase program in December. But Draghi also acknowledged the upbeat economic outlook by adding later that it's less likely that rates will have to be cut, and that there's no longer a "sense of urgency" in monetary policy.
"Given the fact that we can't yet say that we are there with a self-sustaining inflation rate," the Governing Council "preferred to keep this option in the language", Draghi said, referring to the by-now standard commitment to keep interest rates "at present or lower levels for an extended period of time".
Despite the repeated commitment to low or lower rates, the euro rose as much as 0.7pc during the press conference, before paring back gains, propelled also by the news that there'd be no further long-term loan programs for now. But "the expectation, the probability of an expectation that it will actually materialise into lower level, has gone down", Draghi said.
Whether the mixed message was intentional or not, it neatly set the scene for a gradual progression that ought to take place during this year, as quantitative easing is slimmed down to €60bn a month from April and the scheduled end of bond buying, in December, approaches. Investors already have higher borrowing costs in sight and are debating the sequence in which the ECB will normalise monetary policy. That will include lifting official interest rates from the current all-time low of zero.
Yesterday, Draghi evaded a question about lifting interest rates before the end of QE - but essentially left it open. Instead, he focused on wages, which haven't really delivered significant benefits to ordinary citizens yet. Inflation feeding through to wages - known as a "second-round effect" - is what the ECB wants to happen now.(Bloomberg)