The European Central Bank won’t cut interest rates in the second quarter, Governing Council member Robert Holzmann said, adding that market expectations for a reduction are premature.

The ECB may not yet have reached the end of its hiking campaign as the inflation outlook carries uncertainties related to wage dynamics and food prices, Holzmann told reporters in Vienna.

He called money market predictions of monetary policy easing speculative arbitrage.

“That would be somewhat early,” Holzmann said, referring to the second quarter. “We are still trying to communicate, please, don’t think that we are already at the end of the path.”

Holzmann, traditionally among the ECB’s hawkish policymakers, was speaking in reaction to markets pricing in a full percentage point of reductions next year amid signs of a slowing economy.

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ECB policymakers have begun to debate the timing of potential rate cuts, though even that discussion has incited some pushback.

Greek central bank Governor Yannis Stournaras has said that officials could consider easing in the second half of 2024, though his German colleague, Joachim Nagel has vehemently pushed back on that prospect. President Christine Lagarde said last week that any such reduction isn’t going to happen “in the next couple of quarters.”