The European Central Bank kept interest rates unchanged at 2% for the third meeting in a row today and offered no hints about future moves as it enjoys a rare period of low inflation and steady growth, even in the face of trade turbulence.
The central bank for the 20 countries that share the euro cut rates by a combined 2 percentage points in the year to June but has been on the sidelines since.
It has made clear it is in no hurry to change policy given inflation is at target - a sweet spot not achieved by the US Federal Reserve, the Bank of England or the Bank of Japan.
ECB President Christine Lagarde told a press conference that recent trade deals - including the latest US announcement that it would trim tariffs on China after US President Donald Trump met China's Xi Jinping - had lowered some downside risks to the global economy, but that major areas of uncertainty persisted.
"We will do whatever is needed to make sure we stay in a good place," she added, while swatting away questions on what that meant for the future path of ECB interest rates.
"I would not complain too much about growth at this point in time," Lagarde said, citing data earlier on Thursday which showed the euro zone economy grew a slightly better than expected 0.2% in the third quarter.
An ECB Governing Council statement released after the rates decision noted that a robust labour market, solid private sector balance sheets and the bounce provided by past interest rate cuts were all supporting the economy.
"Economic 'resilience' is keeping the ECB doves in check, and the policy pause on the rails," Deutsche Bank chief European economist Mark Wall said.
Financial markets were broadly unchanged.
Data signals mixed on the economy
While some policymakers have repeatedly warned about downside risks, some key data have surprised on the upside in recent weeks, pointing to a more balanced outlook.
Thursday's GDP figures beat the ECB's prediction of stagnation, with Spain and France both outperforming in July-September. Some early fourth-quarter figures suggest growth could pick up.
Business activity, as measured by a Purchasing Managers' Index survey, is accelerating, while sentiment in Germany, the biggest euro zone economy, is improving and businesses are becoming more optimistic.
But these relatively upbeat reports are balanced out by more sombre data showing that industry continues to suffer and that exports to the United States are down sharply. There are also signs China is dumping goods it cannot sell in the US on European markets.
The real question then is whether the outlook can remain in such a fine balance given the continued tariff hit, Chinese trade diversion and weak exports.
A strong euro is weighing on inflation, but the currency has steadied in recent weeks and a hawkish tone from Federal Reserve Chair Jerome Powell after Wednesday's rate cut may limit further gains.
Undershooting risk would strengthen the case for a "slightly lower" policy rate, ECB Chief Economist Philip Lane has argued - a message that is consistent with market pricing which now puts the chance of one last cut by next June at around 40% to 50%.
But the majority of economists see rates remaining where they are on the premise that uncertainty will fade, households have plenty of savings and Germany is raising spending sharply.
Inflation could still undershoot the ECB's target next year but it is then seen coming back up and policymakers have made it clear that they can tolerate temporary deviations.
The real test of this tolerance is only likely to come in December, when the bank presents fresh projections, including initial estimates for 2028.
