Energy Price Surge Could Delay Inflation Target

European Central Bank (ECB) Chief Economist Philip Lane said that if energy costs ease, the European economy will continue to grow steadily at a moderate pace. However, he warned that a second surge in energy prices could push inflation higher before it reaches the ECB's target of 2% by mid-2027.

Lane made these comments in an interview with Le Temps. He also noted that money markets have priced in nearly 35 basis points of tightening by year-end, but have fully priced in a rate hike at the December 17 meeting.