The ECB kept rates steady on Thursday, as expected.

The decision was notable. Or as notable as widely-telegraphed holds can be.

Christine Lagarde’s rate-hiking campaign was a singular event in the institution’s short history. She started from an unenviable position: Rates were in negative territory and the ECB’s capacity to raise them expeditiously was hampered by the bank’s preexisting forward guidance. You might call that comeuppance, and you wouldn’t be wrong.

Eventually, Lagarde was able to get the balling rolling, though, and 14 short months later, rates were 4%.

By the grace of — I don’t know — Zeus, maybe, Europe avoided an existential energy crunch last winter and between government initiatives to shield households and a sharp moderation in natural gas prices following last year’s 90-degree angle surge, inflation receded. But not by enough. And it’s now embedded in services and wage-setting, where price pressures are notoriously hard to dislodge.

“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong,” the Governing Council said Thursday. “Based on its current assessment, the GC considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution” to returning inflation to target.

Again: This was history. Had you suggested to ECB policymakers prior to the pandemic that soon enough, they’d raise rates 450bps by way of 10 consecutive hikes, you’d have been dubbed a crazy person. Of course, if you suggested to policymakers prior to the financial crisis that, thanks to a decade of experiments with negative rates and large-scale asset purchases, “high” yield euro bonds would eventually sport negative yields, you’d likewise have been deemed mentally unstable. One crazy turn deserves another.

Although the October statement language didn’t rule out another hike, the GC would rather not. PMIs released earlier this week plainly suggested the European economy remains on the cusp of recession. The latest bank lending survey, also released this week, showed credit demand remains lackluster amid tighter lending standards.

Assuming the full impact of the ECB’s tightening campaign is yet to manifest across economies, it’s fair to say a recession in Europe is likely and that any sort of robust recovery is some ways away. And yet, inflation is still double target and the ECB, like its counterparts across the developed world, is terrified of a rekindled price impulse.

“Having a discussion on [rate] cuts is totally premature,” Lagarde insisted on Thursday. “The fact that we are holding doesn’t mean we will never hike again.”