The euro zone achieved its inflation target in June, with consumer prices rising 2% year-over-year according to Eurostat’s flash data. This marks a slight increase from May’s 1.9% reading and aligns perfectly with the European Central Bank’s goal.
Core inflation remained steady at 2.3%, but services inflation edged up to 3.3%, signaling potential underlying price pressures. ECB Chief Economist Philip Lane indicated that the major inflation-fighting cycle is complete, though the bank will remain vigilant.
Markets responded positively, with the euro gaining against the dollar. Despite external risks like oil price volatility and potential U.S. tariffs, economists expect the ECB to pause rate changes in July before potentially making a final 25-basis-point cut in September.