Inflation has tumbled spectacularly across much of the world this year but the job is only half done, even if top central banks are now getting ready to wrap up their most aggressive interest rate hike cycle in history.
The "last mile" in rooting out pervasive price growth is still set to take years, so easing up now appears contradictory to policymakers' message a year ago that public trust required bringing inflation back to target quickly, even if that meant inducing a recession.
But this is happening while the job market remains exceptionally tight on both sides of the Atlantic, an economic paradox that is leading some to question if inflation is falling regardless of monetary policy - not because of it. This disconnect led the German central bank to issue a warning to peers this week that a tough task may still lie ahead for policymakers.
"Markets do not trust the ECB to deliver to the 2% inflation target ... markets are pricing the ECB to accept an inflation overshoot," Piet Haines Christiansen at Danske Bank said.
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