- Eurozone core inflation still elevated, but on a good path.
- Eurozone headline inflation will ease further in Q1 2026 due to energy price base effect, will return to 2% over medium term.
- ECB is in a good place in terms of monetary policy.
- We are very far from de-anchoring of inflation expectations to the downside.
- Strong euro exchange rate is driven by a positive confidence shock in EU, not interest rate differential.
Again, there’s nothing new here but she sounds much more confident that inflation will return to target compared to her comments in the past months.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
