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ECB Exits NIRP, Unveils ‘TPI’ On Irony-Laden ‘Whatever It Takes’ Anniversary
The ECB hiked rates for the first time in more than a decade Thursday and sketched the contours of a
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If you’re ever starved for new content ideas, you could always bring back the posts detailing the world of Italian political turmoil. Those were always guaranteed to be entertaining reads.
We have had fewer than 50 presidents since the country was founded. Just since WWII (Mussolini) Italy has had 66 new governments, an average of one every 1.14 years. That’s turmoil folks.
Does it make sense for ECB to tighten? EU unemployment is not low, retail sales not especially strong, economy rolling over, my guess (nothing more) is that EU inflation is mostly supply side (energy and its flow-through). How will raising rates bring down EU inflation when energy inflation is +40%? Way above my pay grade but I don’t really get it.
It’s likely less a matter of tightening to fight inflation and more a matter of not contributing to inflation through continued easing. Of course there’s also the impulse to “do something, anything!” even though they may be powerless to change the trajectory of inflation.