Chance of Chronic Euro-Area Lowflation Has Almost Doubled

(Bloomberg) -- Faith in the European Central Bank’s ability to coax inflation to target was shaken during the global pandemic, and it’s taken a trillion euros of asset purchases to partially restore that confidence. Even so, Bloomberg Economics’ analysis of inflation options pricing suggests the likelihood of chronic lowflation -- price increases of less than 1% -- has almost doubled since the start of the pandemic.

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