Global Data Pod: Inflation Monitor: Inflation down, but not out

Global inflation momentum eased in mid-2024 as sharp declines in energy prices pulled headline figures down from 3.7% to 3.3%. Despite this, core inflation remains sticky near 3%, reflecting persistent underlying pressures. While the Euro area shows potential for a return to the 2% target supported by moderating wage growth, the U.S. faces a more complex outlook with a firm labor market and ongoing services inflation. Risks to this disinflationary path include renewed energy price volatility and potential supply chain disruptions in the Red Sea and Strait of Hormuz. Policymakers continue to balance these signals, with the European Central Bank likely to maintain a hawkish stance while the Federal Reserve monitors high-frequency data to determine the necessity of further rate adjustments.