Federal Reserve interest rates and ECB interest rates moving in opposite directions

The Federal Reserve is sending out the message that it is going to be very cautious about cutting interest rates, and that it may not cut them at all. The ECB, on the other hand, has made no secret of its desire to cut its key interest rates. The positions of the two central banks may come as a surprise: Inflation measured in a comparable way (in the United States, excluding rents imputed to homeowners) is very similar in the United States and the euro zone; In the recent period, unit labour costs have risen much faster in the euro zone than in the United States; Inflation in the euro zone is currently being reduced by the fall in import prices, but this fall will turn into a rise in the second half of 2024. In fact, the ECB should be more concerned about the outlook for inflation than the Federal Reserve.