Eurostat released data on Tuesday stating that annual inflation across the 21-nation euro zone rose to 3.3% in August from 2.9% in July. ^[1] ECB official Rehn warned that a prolonged conflict could negatively impact the inflation outlook in the Eurozone. ^[2] Supply shocks impose a complicated dilemma for central banks because they move inflation and the economy in opposite directions. ^[3] Supply shocks with negative impacts on economic activity and prices have become more recurrent in the current decade. ^[4] Core inflation, which excludes energy and food, slowed to 2.1% in August from 2.2% in July, falling below the 2.5% forecast. ^[5] Higher crude oil and natural gas prices, along with wider refining margins, pushed consumer prices up amid energy-market disruption linked to the war involving Iran. ^[6] Markets have widely anticipated a 25-basis-point increase in the ECB deposit rate to 2.5% at the September 10 meeting, following the June hike. ^[7] Maritime traffic at the Strait of Hormuz has nearly come to a standstill, increasing concerns about oil and gas supply. ^[8] Rehn stated that if the war in Iran turns into a long-term attrition process, energy costs could remain high. ^[9] Rehn urged the ECB not to become complacent in the face of new inflation pressures. ^[10] In August 2022, at the Jackson Hole symposium, Isabel Schnabel of the ECB Executive Board stated that the macroeconomic context was entering an era of 'Great Volatility' with larger, more frequent, and persistent supply shocks. ^[11] These aggregate episodes have translated into increases in global inflation and a slowdown in worldwide economic activity, although the slowdown has been moderate so far. ^[12]