There was a little excitement in the run up to the ECB meeting this week.
Market participants were intrigued to see how the central bank would put the results of its strategy review — including its new inflation target — into practice.
ECB president Christine Lagarde had also promised a new style of communication, with simpler and more accessible statements, written in plainer English.
In the end, the ECB only really made a subtle shift with its press releases.
The main statement was a just a little more to the point, and it also included subheadings setting out each of the main areas of monetary policy.
But the change in approach emphasises a fact that has been apparent for some time now: communication is the main policy tool the ECB has left.
The central bank went into the coronavirus pandemic with interest rates at rock bottom, as well with constraints on how many more assets it can purchase.
It has found creative ways of responding to the crisis, particularly by altering the terms of its bank lending schemes.
But there is little confidence the ECB has any additional firepower left, as it says it does, and the market hardly seems ready to talk about tapering.
It was no surprise, then, that Thursday was all about “forward guidance” — on possible inflation responses, on interest rates, on the fate of temporary schemes set up during the pandemic.
In the coming months Lagarde’s main task will be aligning all market participants behind the same narrative about the direction of monetary policy.