The ECB kept rates on hold for a third consecutive meeting on Thursday.

The outcome of the January policy gathering was a foregone conclusion. No one expected much from the proceedings. The question was (and still is) when Christine Lagarde will pivot to rate cuts. The answer is… well, it’s complicated.

PMIs released this week highlighted the dilemma for the Governing Council. Growth’s moribund and inflation’s obviously come down dramatically in Europe. Indeed, even the hawks (some of them, anyway) were compelled to admit that the drop was more rapid and more pronounced than they anticipated. But price pressures remain, and there’s a link with wages, which concerns policymakers.

Philip Lane recently suggested the bank needs to wait for an update on pay growth before they can comfortably cut rates. He was referring specifically to a late-April refresh on a key wage tracker when he told Il Corriere della Sera that, “By our June meeting, we will have those important data.” Although he added caveats, the message seemed clear enough: The GC is thinking June, while markets are still fixated on April.

Anyway, the new policy statement said that “aside from an energy-related upward base effect” on headline CPI, the “declining trend in underlying inflation has continued” as the bank’s historic hiking blitz squeezes financing conditions and dampens demand. “This is helping to push down inflation,” the GC said.

As a reminder, inflation rose 2.9% YoY in December, quicker than November’s pace, but the ECB thinks the uptick will almost surely fade. Inflation should return to target next year, the bank reckons.

Lagarde on Thursday reaffirmed that rate cuts are likely to commence this summer, but said the GC isn’t debating them yet. “The consensus around the table… was that it was premature to discuss rate cuts,” she said. “We need to be further along in the disinflation process before we can be sufficiently confident that inflation will actually hit the target in a timely manner.”

She mentioned developments in the Mideast and the possibility that geopolitical frictions (i.e., war) might “push energy prices and freight costs higher.”

Ultimately, it didn’t matter. As noted above, markets want an April cut, and traders are for now insisting on it. A move at the April gathering is priced at 80%, give or take.

And that’s that. There wasn’t anything else to glean from the January ECB meeting.