The near-certitude of policy interest rate cuts by the Fed and the ECB in the near future is rapidly fading away. In the US more than in the eurozone the latest inflation data are worrying. A major lesson from history is that stepping back too early from a restrictive monetary policy is only asking for trouble further down the road.

The enthusiasm for a new EU Defense Fund should be tempered. Not only are there the problems and shortcomings that surfaced with the implementation of the EU’s most recent fund initiative, the Recovery and Resilience Facility, there is also a more fundamental issue that can no longer be ignored. This type of EU Fund creates enormous perverse incentives. Better alternatives are available.