The European Central Bank (ECB) governing council is meeting again on Thursday, a full six weeks since its last get-together, to review and set regional monetary conditions and, importantly, to update its economic forecasts for the remainder of 2021 and beyond.
At the conclusion of its 22 April meeting, ECB policymakers elected to maintain key regional interest rates on hold at record low levels.
Despite the vaccine roll-out, economic unlocking and a pronounced increase in inflation fears, these core rates are unlikely to be adjusted and, furthermore, seem certain to remain in place for some time to come.
While there were no surprises at that last meeting, it was clear that some important decisions would need to be taken at this, the next policy-setting debate.
The biggest of these decisions relates to the pace of bond purchases and in particular those undertaken as part of the augmented Pandemic Emergency Purchase Programme (PEPP).
As the economic outlook improves, the ECB must decide if it is appropriate to continue with these PEPP purchases at the slightly higher pace or even, wonder some, at all?
For now, it seems likely that the ECB will maintain the prevailing setting, arguing that prospects remain heavily dependent on continuing uncertainties associated with the Covid virus, vaccine roll-out and sovereign bond yields.
Why the latter? Regional data, released by Eurostat, confirms the impact of addressing the pandemic on individual countries' public finances. Most countries have reported their largest budget deficits and highest debt ratios since the eurozone was created in 1999.
This matters because historically low sovereign debt yields makes managing mountainous indebtedness possible, even sustainable, going forward. Indeed, all regional governments have spent less on debt servicing in 2020 than they did, on average, each year between 1999 and 2019.
What likely keeps central bankers awake at night is the persistent fear that yields might rise sharply over the second half of the year in response to rising inflation concerns. This is why the ECB's updated economic assessment is so crucial.
If regional inflation were to rise above the 2% target this year, but fall back towards 1% in 2022, then it seems highly unlikely that the ECB would feel moved to tighten monetary conditions.
It seems likely that the ECB will emphasise and reiterate the now standard central bank mantra that prevailing inflationary pressures remain transient, even if these temporary effects linger for some time.
This could prove rather convenient given that every year since its inception the Bank's inflation forecasts have predicted that year on year increases in CPI inflation would return to 2% within two years, yet in reality core CPI increases have held in a 0.5% - 1.5% range almost without exception for 16 years.
The ECB could go further. At the conclusion of the ongoing Strategic Review, the inflation target could be raised, more formally, to 2%. Alternatively, it might switch to a flexible average inflation target similar to that currently pursued by the US Federal Reserve, providing more room for manoeuvre.
It is noteworthy that the highly respected governor of the Bank of France François Villeroy de Galhau has advocated just such a move, garnering the support of the estimable ECB chief economist Philip Lane.
Also possible, and very much in keeping with the desire to minimise lasting economic damage, might be to place greater policy emphasis on what might hitherto have been regarded as a secondary objective, that being "to support the general economic policies in the Union", including achieving full employment and "balanced growth".
Such an adjustment would require an overhaul of the ECB's comparatively narrow mandate, but given the enthusiasm with which President Christine Lagarde has shown for adopting causes such as the "greening" of the central bank, anything is possible.
Jeremy Batstone-Carr is part of the Raymond James European Strategy Team