Europe's mid-sized inflation shock requires measured response, ECB's Lane says

Euro zone inflation is expected to stay above 3% for the rest of the year, according to ECB Chief Economist Philip Lane. He described the backdrop as a mid-sized inflation shock and said it calls for a measured policy response, reinforcing a cautious and data-dependent ECB stance. The message is modestly hawkish for rates and broadly relevant for euro-area markets.

Analysis

Euro zone inflation is expected to stay above 3% for the rest of the year, according to ECB Chief Economist Philip Lane. He described the backdrop as a mid-sized inflation shock and said it calls for a measured policy response, reinforcing a cautious and data-dependent ECB stance. The message is modestly hawkish for rates and broadly relevant for euro-area markets.