The European Central Bank (ECB) has kept interest rates unchanged at 3.75 per cent, but indicated there will be a further hike in June.
A flow of solid economic data and persistent concerns about future inflation have given ECB President Jean-Claude Trichet little reason to jolt financial markets.
"Strong vigilance is of the essence in order to ensure that risks to price stability over the medium term do not materialise," he said. References to "strong vigilance" are the ECB's standard way of signalling that an interest rate increase is very likely the following month, and Trichet's remarks chimed with the message he delivered a month ago.
Reading the ECB's monthly policy statement, Trichet said key interest rates were moderate and that monetary policy continued to be on the accommodative side, echoing April's language.
"Looking ahead, acting in a firm and timely manner to ensure price stability in the medium term is warranted," he told reporters in Dublin, where the ECB earlier held its meeting.
Beyond seeking confirmation of a June rate rise to 4.0 per cent, economists had been wanting to know whether this will mark the peak of ECB rates.
But Trichet declined to answer directly a question on the market's expectations of interest rate rises after June, noting that the ECB never pre-committed itself to future policy moves, and based its decisions on the latest economic data.
Asked if the ECB would pause in raising rates after June, Trichet said the Governing Council would decide at the time, and would do whatever was necessary to ensure stable prices.
The US Federal Reserve held rates at 5.25 per cent yesterday, and the Bank of England raised its benchmark rate by a quarter percentage point to 5.5 per cent earlier today.