Will a fall in activity cause inflation to fall sharply without the need for central bank intervention?

Financial markets expect a modest rise in central bank interest rates, in both the United States and the euro zone. A modest rise is certainly insufficient by itself to drive down inflation, given its level. But could activity fall sufficiently in the United States and the euro zone to get inflation to fall significantly despite the timid increase in interest rates? Such a downturn in activity could be caused by: A fall in household consumption due to the decline in purchasing power and limits to the decline in the savings rate; A fall in housing purchases due to the rise in mortgage interest rates; Companies’ supply chain problems; In the United States, fiscal deficit reduction. However, even if growth is weak in the United States and the euro zone, the scarcities that have driv en up inflation are lasting (shortages in the supply of energy, commodities, labour, transport, etc.). Moreover, China, which is now in recession, is set to grow strongly in the second half of 2022, adding further impetus to commodity prices and therefore inflation. Last, wages in the euro zone will pick up markedly.