Eurozone Inflation Steady at 2.2%, Core Prices Rise

Euro zone inflation remained at 2.2% in April, slightly above the European Central Bank's (ECB) 2% target, with a notable rise in core inflation driven by higher service prices. This increase in underlying price pressures has caused some concern among ECB policymakers, especially as trade tensions with the U.S. complicate the economic outlook. Despite these concerns, economists see a strong likelihood of another ECB rate cut in June, with at least one additional cut possible before year-end. The ECB has recently shifted its communications, suggesting that inflation is essentially at target, partly due to trade strife dampening growth and prices. However, policymakers are being cautious, emphasizing a data-dependent approach to further rate decisions. The broader economic environment, including potential retaliatory measures and global supply chain challenges, continues to weigh on inflation forecasts and monetary policy deliberations.