Clearly, European governments and the ECB believe in the scenario of rapidly falling inflation

European governments have chosen to boost household purchasing power in the face of rising energy and food prices through public transfer payments; the ECB has decided to exit its expansionary monetary policy only very cautiously. This shows that both European governments and the ECB favour the scenario of rapidly falling inflation. If they are wrong, which we believe is very likely: Governments will face an endless increase in spending to boost household purchasing power; The ECB will eventually have to raise interest rates sharply and change its strategy in the face of persistent inflation.