Eurozone inflation rate above forecasts in February despite rapidly easing energy prices

• The consumer price inflation in the Euro Area inched lower to 8.5 percent in February 2023, the lowest since last May, but above market expectations of 8.2 percent, a preliminary estimate showed.
• The rate added to signs that inflationary pressure remained high in Europe and bolstered expectations that the European Central Bank will remain hawkish for longer.
• Meanwhile, the core rate, which excludes volatile items such as energy and food, rose to a fresh record high of 5.6 percent in February.
• The European Central bank is expected to increase interest rates by another 50 basis points at its next meeting on March 16 as price pressures remain high and the economy has averted a recession so far.
• ETFs: (EWG), (GF), (EWI), (EWQ), (EWGS), (FGM), (DBGR), (DXGE), (HEWG), (DAX), (FLFR), (FLGR), (FLIY).

Comments

[PITX3]

Eurostoxx is flat, so it seems is not a problem at all, is only a problem for the US

[Dale Roberts]

Oh crap, we're F'd.

Well, those who do not understand inflation/stagflation and assets.

aka most everyone on Seeking Alpha?

Ha ;)

#allweatherportfolios

[godspeedmax]

Food prices are through the roof!

[Michink]

It's so ridiculous. To reduce inflation you need positive real (not nominal) interest rates. If inflation is at 8,5% and nominal interest rates are at 2,5% it means the real interest rate is at -6%.
Of course inflation doesn't go down...central banks aren't serious because they know that which such huge amount of debt (private and public) raising rates to a level that can bring inflation down to 2% will cause a massive recession and could crash everything...a problem even bigger than inflation.

If the ECB is serious, they need to raise rates to double digit (10%+)....without real interest rates it's impossible to bring inflation down to below 2%.

The same is true in the US btw. With real interest rates still negative it's not surprising that the job market and consumer spending are still strong.

[warshack]

@Michink you are correct that they want higher inflation for longer. Don't look at what they say, look at what they do.

[Cyclone Ranger]

@Michink "To reduce inflation you need positive real (not nominal) interest rates."

Fed monetary policy is just fine tuning. Bad gov't fiscal policy is the steering wheel driving US off the cliff.

To reduce inflation, you need low taxes and significantly lower gov't regulations. Trump did it. Remember "winning."