Nataxis Research comes out with a note detailing how long-term supply-demand imbalances in the eurozone they will keep rates higher for longer than most markets currently expect.
State of supply and demand for goods and services in the euro area
In the most recent period (from the beginning of 2023), insufficient demand is cited as a factor limiting industrial production in the eurozone. But if we look at services, construction and the economy of the Eurozone as a whole, it is still massively in a situation of excess demand for goods, services and labor with insufficient supply.
Restrictive monetary policy has not yet caused the eurozone to return to a situation of excess supply of goods and services.
As long as the eurozone is in a state of excess demand for goods and services, inflation will be higher than financial markets expect.