That Snapping Sound Is Euro-Inflation’s Neck

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Christine Lagarde has a way with words. “We're breaking the neck of inflation,” she said in the Slovenian capital of Ljubljana as she announced that the European Central Bank was cutting interest rates. “It’s not broken completely yet, but we’re getting there.” She was responding to a question that made the analogy. Rather like “exorbitant privilege,” the description applied by Valery Giscard d’Estaing to the dollar’s status as a reserve currency, the phraseology might be inadvertently powerful due to a direct translation from French. But it’s difficult to imagine her US counterpart Jerome Powell being quite so emphatic.

There is good reason for Europe’s central bankers to take heart, because headline inflation in both the euro zone and the UK has — to much surprise — dropped in the last month below the official 2% target: