Commentary
As U.S. inflation has peaked and edged down slowly, those in Europe are following suit. Yet central banks dare not abruptly stop their tightening despite the highly reliable yield curve inverting deeply (near 100 basis points), showing a strong signal of recession ahead. Even though they know policy takes time to be effective where a stop now would still have a momentum (residual) effect for a few more quarters, they are willing to run a high risk of overdoing it by creating a recession or, more concretely, deepening or worsening it.
