<div id="readability-page-1"><ul><li>Wage tracker indicates easing labor costs</li><li>Surveys indicate a rise in other costs</li><li>Indicators of underlying inflation have changed little in recent months</li><li>Short-term inflation expectations have moved up</li><li>High energy costs make firms and households reluctant to invest</li><li>Supply chains coming under pressure</li><li>Economy was showing momentum before current turbulence</li></ul>The headlines from Lagarde's press conference confirm what the statement hinted at — the ECB is sitting on its hands but the risk balance has shifted under its feet. Rates held at 2.15% on the main refi, 2.00% on the deposit, exactly as priced. The euro initially sold off on the no-pre-commitment language, but Lagarde's tone is doing some lifting on the other side.The &#34;favourable starting point provides some cushioning&#34; framing is important. Lagarde is telling markets that the euro area entered this shock with inflation near target and a resilient economy, so the ECB has runway before it has to react. That's a way of buying time without committing to anything.&#34;Households in solid financial position&#34; and &#34;labour demand has cooled further&#34; are running in opposite directions narratively — balance sheets are fine, but the labour market is loosening. The wage tracker pointing to easing labour costs is the disinflationary anchor she keeps coming back to, and it's the single biggest reason the ECB can credibly stay on hold rather than getting forced into a hike.Fiscal guidance — &#34;responses should be temporary, targeted, tailored&#34; — is the standard ECB plea to governments not to muddy the disinflation path with broad energy subsidies. Worth noting because if European governments do go big on fiscal support to cushion the energy hit, that changes the inflation math and the ECB knows it.The euro kneejerk was lower on the statement as there was some thinking they would highlight a June hike more explicitly. Pricing on that hike is at 76%. Naturally, the ECB wants to see what happens in the next six weeks before committing. Hopefully the war ends soon and it's notable that pricing is positive today.</div>

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ECB President Lagarde stated that long-term inflation measures are around 2%, with easing labor costs indicated by the wage tracker. Despite rising short-term inflation expectations and high energy costs, the ECB is maintaining current rates at 2.15% for the main refinancing and 2.00% for deposits. Lagarde emphasized the euro area's resilient economy and solid household finances, allowing the ECB to hold off on rate hikes for now. However, she cautioned against broad fiscal measures that could disrupt disinflation efforts, as the market anticipates a potential rate hike in June.

- A wage tracker indicates a relief in labor costs, despite rising other costs and stable core inflation indicators recently.  
- The European Central Bank (ECB) maintained its key refinancing rate at 2.15% and deposit rate at 2.00%, with President Lagarde suggesting the economy is resilient, allowing the ECB time before taking action.  
- Lagarde's comments reflected tension between strong household finances and easing labor demand, highlighting the ECB's preference for targeted fiscal measures rather than sweeping energy subsidies, amidst market expectations for a potential interest rate hike in June.

ECB's Lagarde: Most measures of longer term inflation stand around 2%