There are few periods when monetary policy faces such a density of simultaneous shocks.
Between geopolitical flare-ups, the reconfiguration of energy flows, and the heightened volatility of markets, central banks now operate in an environment where uncertainty is no longer a secondary parameter but a structural given. This context imposes a redefinition of analytical frameworks and modes of intervention, profoundly transforming the way the economy is steered at the global level.
In the euro area, overall inflation, after peaking at more than 10% in 2022, has fallen back to around 2.4% in early 2026 according to the latest estimates. This apparent normalization masks persistent volatility in energy components. Oil prices, fluctuating between 85 and 105 dollars per barrel over the recent months, reflect a structural instability fueled by geopolitical tensions and supply constraints.
In this respect, the cautious stance adopted by the European Central Bank is not a sign of hesitation nor a failure of foresight. It signals a deep transformation of the monetary policy reaction function. Where traditional models rested on stable relationships, the current environment requires a dynamic reading, where causality is shifting and often nonlinear.
Imported inflation: a diffuse threat
Analyzing contemporary inflation requires going beyond aggregated readings. The energy shock acts like an external tax, particularly penalizing for importing economies. In Europe, the energy bill still represents nearly 4% of GDP, with significant differences between countries depending on their energy mix.
