Euro Zone Inflation Jumps

The European Central Bank previously exhibited a Laissez-faire attitude towards inflation, assuming the problem was not all that concerning. However, inflation hit a 13-year high last month, with all signs pointing to even more increases beyond its current jump of 3.4% year-on-year. Rising energy costs and supply chain issues are impacting every segment of the European economy. Given this and the Euro pandemic emergency stimulus scheme expiring next March, investors should expect some policy tightening across the pond. The Euro was trading at $1.16 in early activity Friday.