Inflation Saga Far from Over: Services Inflation in Euro Area Just as Stubborn as in the US, Makes Very Disconcerting Moves

By Wolf Richter – Wolf Street

In the 20 countries that use the euro, inflation in services in February has gotten stuck at around 4% year-over-year for the fourth month in a row, and on a month-to-month basis appears to be accelerating with a 0.8% jump in February from January, the second highest for any February in the data going back to the beginning of the Eurozone, after the 0.9% jump during peak inflation a year ago, according to data from Eurostat today. And ECB Council Member Robert Holzmann came out to say, despite the quiet period before the meeting, wait a minute, we’re in no hurry to cut rates.

Hot services inflation is also dogging the Federal Reserve; in services is where inflation has gotten entrenched and is thriving: The US “core services” PCE price index spiked the worst in 22 years month-to-month, as we saw yesterday. So this is a broader problem.