Euro‑area inflation has returned to 2% for three consecutive months. That marks a technical victory for the European Central Bank after four years of volatility. Manufacturing sentiment sits at a 41‑month high, showing improvement in activity alongside disinflation. Yet the achievement is provisional. Whether inflation stays near target will depend on wage behavior rather than on goods prices.

The present concern with stagflation in the United States arises from a contradiction at the centre of global finance: markets built to anticipate growth and stability continue to advance even when the conditions that support them appear to erode.