Eurointelligence founder Wolfgang Münchau says Time to Bet on an Inflation Overshoot emphasis mine. Our main story today is a skeptical note following [ECB head] Christine Lagarde’s press conference [on July 27]. What became clear to us is that the ECB is still reliant on its forecasting model to determine whether it is on a trajectory to reach the 2% inflation target. This is not a technical issue, but rather it is critical for the assessment of what to expect. Since this model is biased in favor of forecasting the target, we conclude that the potential for a policy error is growing. The big problem with data ... (full story)