The Spanish and German inflation numbers today tell the story of an explosive shoot higher in inflation in the euro area this month. The Russia-Ukraine war is in part contributing to that, with surging fuel prices one of the key details in the reports so far.

The question now is, what will the ECB do about it?

Let's lay down the fact. The ECB has been wrong every step of the way in this whole inflation debate since last year.

And there is a good reason for that as well. Given the sort of inflation developments we are seeing, this isn't anything that central banks can do anything about. Tightening policy isn't going to help with fixing supply chains. It isn't going to fix lockdowns in China. And it definitely isn't going to fix what is going on between Russia and Ukraine.

That's the dilemma faced by the ECB right now. Even if they were to rush to tighten policy, as the market is looking to price that in again today, it isn't going to change anything.

Sure, given more persistent inflation, they will move to act eventually. But the key distinction that must be made is that they aren't likely to act with a sense of urgency. Or at least it wouldn't be fitting with the constant lack of exigency displayed by policymakers for the moment.

Even ECB members Muller and Kazimir are just out saying that they see a rate hike perhaps coming some time in Q3 or later in the year after APP purchases have ended. Woosh.

The other key thing is that with the latest inflation surge, it challenges the ECB's directive of wanting to tighten policy 'gradually'. Acting with haste certainly doesn't fit with that and unless the ECB starts to offer hints of changing its mind on that, I would still argue that policymakers are okay with just sitting on their hands.