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Drop-In: US vs euro-zone – A tale of two inflation cycles

Hopes may be rising that price pressures may finally be easing, but investors risk missing the fact that not all inflation cycles are alike. We think core inflation in the US will fall far faster than it will in the euro-zone, and this will have big implications for policymakers in 2023.

Chief Global Economist Jennifer McKeown held a special briefing with Paul Ashworth, our Chief US Economist, and Andrew Kenningham, who heads our euro-zone team, about why we think these economies face very different core inflation outlooks in the coming year – and what that means for interest rates.

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