(Bloomberg) -- One week after the European Central Bank shirked from offering any signal about its next interest-rate move, hawkish officials are getting bolder about the need for further tightening.

With last Thursday’s half-point hike having arrived without incident, a quarter-point Federal Reserve increase also materializing, financial turmoil subsiding, and confidence building that the euro zone’s bank system has weathered market scrutiny, policymakers are once again daring to state the case for higher borrowing costs. 

“Without this episode, the risks to the inflation outlook were so strongly tilted to the upside that I would have been very convinced that we need to make another step in May,” Dutch central-bank chief Klaas Knot said in Amsterdam. “I still think that we need to make another step in May, but I don’t know the size of that.” 

A long-time hawk, Knot spoke in the wake of remarks by colleagues with normally similar view points, including policymakers from Austria and Germany. While all comments remain tentative, the prevailing tone is the closest yet seen in the ECB discourse to business as usual after a nervous couple of weeks.  

“We have to tame inflation, and to do so, we have to be bold and decisive,” Bundesbank chief Joachim Nagel said in a speech in London on Wednesday evening. “Our job is not done yet. If inflation develops as projected, further interest-rate hikes have to follow.”

In Vienna the next day, his Austrian colleague, Robert Holzmann — normally at the most hawkish end of the spectrum — was also talking in more assertive terms again, saying that as of today, the ECB will “probably have to add” to its recent increases in May.

Estonian central-bank governor Madis Muller was more circumspect, though still holding out the possibility of more to come. 

“Looking at how quickly and sharply the interest-rate increases have taken place in less than a year, I dare say the bigger part of this is behind us,” he told local radio. “We need to get inflation under control, need to keep working until we have confidence that the backbone of inflation is broken.”

Money markets are taking notice. They now place almost 90% odds on a quarter-point hike in the deposit rate to 3.25% in May with a 3.5% peak by September. 

Greek Warning

Given the events of recent days — which reached a denouement in Switzerland as UBS Group AG took over foundering Credit Suisse Group AG — more dovish policymakers remain emboldened in their calls for caution over what to do next. 

“We should make no precommitment,” Yannis Stournaras, the Greek central-bank governor, said in Paris. “I’m glad that we decided in our last meeting that we’ll give no forward guidance.” Bank of Italy chief Ignazio Visco echoed that in a speech later on Thursday, calling for caution.

Mario Centeno of Portugal also warned that a careful approach to tightening is required. 

“The risk of overreacting is palpable, is present, and we should keep it in mind,” he said in Lisbon.

Stournaras pointed out that more tightening in the current environment would mean something different to what it did before the outbreak of turbulence, given the impact now seen on financing conditions. That’s a point that Knot himself agrees with regarding the next decision on rates.

“One of the factors that will go into that position is how much sort of extra tightening we are already getting from this risk aversion,” the Dutchman said.

The more open discourse among governors isn’t yet reflected in comments from the ECB’s Executive Board. President Christine Lagarde, in a major speech on Wednesday, stuck with wording that if the “baseline” holds, then there will be more “ground to cover” with monetary policy. But officials are neither committed to raising rates further, nor are they finished hiking, she said.

What all policymakers agree on is that the current juncture, and the calendar schedule that has placed the next gathering on May 4, means that no-one will be rushing to conclusions.  

“Luckily, our next meeting is only six, seven weeks away from now,” Knot said. “So we still have time.”

--With assistance from Cagan Koc, Alessandra Migliaccio, Sotiris Nikas, Alexander Weber, Jonathan Tirone, Ott Tammik, James Hirai and Joao Lima.

(Updates with Centeno starting in 12th paragraph)

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