The Facts
According to data released Wednesday, eurozone inflation slowed for the first time in November since mid-2021 as energy prices eased.
This comes as on Monday, European Central Bank (ECB) Pres. Christine Lagarde conveyed skepticism that inflation has peaked as the ECB is expected to make another rate hike in mid-December.
The Spin
Narrative A
While the road to economic recovery is far from over, the latest data brings much-needed relief to the eurozone's tumultuous economic environment and signals that the ECB's strategy may finally be working, strengthening the case for more moderate ECB action next month. This is good news.
Narrative B
Although this is a welcomed reverse to months of unabating price increases, it's too soon to ease monetary tightening. Inflation may have eased in November, but so did economic growth — the eurozone isn't out of the woods, and to pretend otherwise would have disastrous consequences.
