Inflation in the eurozone is falling significantly, Stephanie Schoenwald at KfW Research says in a note. With the peak of the energy shock now behind us, significant second-round effects on the labor market can be largely ruled out, she says. Eurozone inflation slowed faster than expected in June to 2.8% from 3.2% in May. "This reduces the likelihood of a further interest-rate hike by the ECB," Schoenwald says, noting that a hike in July now looks remote. Still, more monetary tightening down the line cannot be ruled out. "Only the data from the coming weeks and months will reveal how much additional price pressure the four-month high in energy prices is still exerting on the economy." (don.forbes@wsj.com)
Dow Jones Newswires
Eurozone Unlikely to Face Significant Second-Round Inflation Effects — Market Talk
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Inflation in the eurozone is falling significantly, Stephanie Schoenwald at KfW Research says in a note. With the peak of the energy shock now behind us, significant second-round effects on the labor market can be largely ruled out, she says. Eurozone inflation slowed faster than expected in June t…