Inflation in the eurozone is running at 8.1% with no sign of slowing, but give the European Central Bank credit for obstinacy. Cutting through all the hawkish chatter surrounding its meeting this week, ECB President Christine Lagarde’s attitude remains one of reckless, determined patience.
Coming into this week’s policy meeting the ECB’s policy rate sat at minus-0.5%, and after record inflation data last week and a tightening cycle underway in the U.S. and United Kingdom, that ECB rate . . . still sits at minus-0.5%. Ms. Lagarde said she’ll raise the rate by 0.25 points at the next meeting in July. The eurozone will wait until September at the earliest to get a policy rate that’s zero or barely positive in nominal terms. These rates remain deeply negative in real terms.
