- Surge in energy prices is reducing demand, raising production costs
- Most market-based measures of inflation expectations indication inflation around 2% over the medium-term
The ECB is slowly building up the narrative of a growth slowdown and that may be something that could be used to steer expectations away from rate hikes through the year. And de Guindos is also throwing in talk of inflation heading back to 2% at some point, though it remains a rather distant prospect at this point in time.
