The European Central Bank meets on Thursday for the first time since Donald Trump returned to office, leaving U.S. tariff threats looming over the euro zone's sluggish economy and potentially complicating the economic outlook.
Traders reckon further rate cuts are a done deal, so the question is whether the ECB drops any new hints on the path ahead.
"They expect President (Christine) Lagarde to say the door to further rate cuts is open," said Bruno Cavalier, chief economist at Oddo.
Here are five key questions for markets:
1/ What will the ECB do on Thursday?
Most likely, cut the key deposit rate by another 25 basis points to 2.75%.
Markets fully price the move and the ECB removed language from its guidance in December that had pledged to keep rates restrictive.
"There has been no change to the outlook since December," said Pictet Wealth Management's head of macroeconomic research Frederik Ducrozet.
2/ How does Trump's return change ECB thinking on tariff risks?
It doesn't so far, economists reckon.
U.S. President Trump did not impose day-one tariffs and said the U.S. is not ready for universal ones. However, he put Canada, Mexico and China in the firing line and complained about the terms of trade with the European Union.
Trump told the World Economic Forum in Davos via video last week that other economies will face tariffs if they make their products anywhere but the U.S.
While some analysts take comfort in the initial approach being more measured than expected, that could change.
For the ECB, it's all about how tariffs impact euro zone inflation, whether directly or through their impact on demand.
3/ How far does the ECB need to cut rates?
Traders expect almost four rate cuts from the ECB this year and some policymakers have explicitly agreed, pointing to rates falling towards 2%.
That would put rates within estimates of the so-called neutral rate, which neither restricts nor accommodates growth.
But some hawks sound more cautious on the pace, with top hawk Isabel Schnabel recently warning that the bank needs to have a "deep think" on how far and quickly to cut.
Once rates reach 2.5% "they will have to think a bit harder to decide where to go", said PIMCO portfolio manager Konstantin Veit.
But given a weak economy, the risk is skewed towards rates falling to 1.75%, he added.
Lagarde said last week the neutral level was anywhere between 1.75% and 2.25%.
4/ How worrying is the uptick in inflation for the ECB?
Not very, economists reckon.
Yet the rise is in line with the bank's expectations and chief economist Philip Lane is confident wage growth is slowing and will quickly pull services inflation lower.
He has also warned keeping rates too high for too long could push inflation below target.
While the ECB only targets inflation, as it nears 2%, "it's not as simple as just being a single mandate because after all, growth is important if you want to see where inflation is going to go," said Danske Bank chief analyst Piet Christiansen.
5/ What if the Fed stops cutting rates?
The ECB could slow its cuts, but it depends on the reason.
Traders' Fed rate cut bets have swung in January given uncertainty around the U.S. inflation outlook.
BofA and BNP Paribas expect the Fed to stay on hold this year.
"If they don't cut because the economy is strong in the U.S., it's also good news for Europe.... the ECB could actually be tempted to cut a little bit less," Pictet's Ducrozet said.
"If they don't cut because of a stagflation kind of scenario, then it's a different story and I don't think it makes a big difference for the ECB," he said, noting a fall in the euro to parity, from almost $1.05 at present, would not be a big focus .
