· Although German officials are trying to calm the public about growth prospects the inflation numbers that being churned out are far from reassuring in inflation-wary Germany. Core PPI inflation is on a tear up to a 6.1% pace over three-months and 3.6% Yr/Yr. In Q3-to-date inflation for the Core PPI is running at a 7.1% pace with headline PPI inflation at a 19.4% pace. And Germany is one of those EMU places that tends to keep inflation more under control.
· Growth has been sputtering. Accelerating inflation will simply tie the hands of the ECB for a longer period of time. Everyone believes that falling oil prices make headline inflation less of a threat. But the rising core remains an issue that all central banks will be wary of. Prospects for unwinding elevated core inflation under lower energy prices are good, too. But any core unwind will take time.