Before the war, inflation in the eurozone was close to the bank’s 2 percent target. By May, it had jumped to 3.2 percent. Now, officials warn it will be “well above” target into the first half of next year as higher energy prices also feed through into higher prices for food, other goods and services.
“We are beginning to see a broadening of inflation throughout the economy,” Christine Lagarde, the president of the central bank, said in a news conference on Thursday in Frankfurt.
Submission Statement: Economic news with global ramifications is relevant as it will impact growth, as central banks seek to prevent the current supply shock from further bleeding into inflationary expectations as it did in the early 2020s inflation wave.
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Meanwhile this is what current Fed Chair Warsh said in March, “What I’m most interested in is: What’s the underlying inflation rate? Not: What’s the one-time change in prices because of a change in geopolitics or change in beef?”
With headline inflation at 4.2% in the US, other central banks acting faster may force the Fed to raise rates as well before the bond market does it for them.