EU Economy Slows, Inflation Up -- Just Don’t Call It Stagflation

Crude prices fell today for all the wrong reasons — dropping below $120 a barrel not because energy flows resumed through the Strait of Hormuz, but — as oil traders have warned — because sharply higher prices are beginning to hurt the broader economy and weaken demand.

The production of goods and services in the euro-area unexpectedly slowed at the start of 2026, with soaring gas, oil and petrochemcial costs triggered by the Iran war also threatening to unleash higher inflation. That perfect storm of economic indicators used to be called “stagflation,” but European Central Bank President Christine Lagarde today rejected that description after keeping interest rates steady.