MNI BRIEF: Spillover Risk From U.S. Prices - ECB Accounts

European Central Bank officials considered that spillovers from higher-than-expected U.S. inflation “through a sustained exchange rate effect would likely slow the disinflationary process in the euro area,” accounts of the April policy meeting showed on Friday.

Members agreed that the depreciation of the euro following the release of U.S. inflation March data “pointed to a close monitoring of the impact of the exchange rate on euro area inflation,” the accounts showed. (See MNI SOURCES: ECB Wary Of Any "Significant Divergence" With Fed)

March U.S. CPI was seen “as confirmation that global inflation currently reflected mainly ‘sticky’ services price developments,” though it also reflected idiosyncratic factors.