At first economists wanted to just ignore oil prices, as they were to be “transitory” or even beneficial to consumers everywhere around the world. The fact that economists would actually admit that low oil prices would be helpful (in a vacuum, they are) showed only the desperation given the seriousness of the “unexpected” surrender. Mainstream monetary theory rejects all falling prices, so to suggest the common sense that lower prices are helpful raises very uncomfortable issues about what monetary policymakers are actually trying to achieve. In other words, economics doesn’t want “helpful”, it wants only what it wants; it must be physically painful for Janet Yellen to even have to suggest that the energy price crash is like stimulus in a way no QE ever achieved.

By the time it dawned on the mainstream that oil prices weren’t actually “transitory” the narrative shifted to “secondary inflation”; or that if monetary policy can’t control or influence commodity prices it still, somehow, doesn’t matter. Effective policy could grasp economic channels beyond oil, and it was there that the mainstream tried to establish a second line of retreat.

The preliminary, national indications Friday for European inflation were at least 0.0% if not worse for February, and this morning’s update for the whole Eurozone kept to that expectation. The official HICP figure was -0.2%, worse than even more pessimistic predictions. That, however, was the least of the concerns as even stripping out the renewed petroleum “deflation” Eurozone inflation on the secondary level is faltering.

Consumer prices in the 19-nation bloc declined to minus 0.2 percent from a positive reading of 0.3 percent in January, according to data published Monday. Core inflation, which strips out volatile elements such as food and energy, was at 0.7 percent, down from 1 percent in the prior month. Those are the worst readings since February and April of last year, respectively…

“Not only headline but also core inflation is much lower than the ECB has been projecting — it is not just energy, it is a wider problem reflecting second round effects and weak demand,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “This will provide the ECB with an extra push to deliver more aggressive easing than expected at its March meeting.”