 Eurozone inflation hits record as ECB mauls how quickly to hike. Eurozone inflation accelerated to an all-time high, intensifying the debate at the European Central Bank about how rapidly to raise interest rates from record lows. Consumer prices jumped 8.1% from a year earlier in May, exceeding the 7.8% median estimate in a Bloomberg survey. The acceleration was driven by food and energy after Russia's invasion of Ukraine sent commodity prices soaring. A gauge that excludes volatile items like those rose 3.8%. With rate hikes in full swing in the US and the UK, the ECB is preparing to lift borrowing costs for the first time in more than a decade to combat the 19-member currency bloc's unprecedented price spike. President Christine Lagarde indicated last week that quarter-point increases are likely at meetings in July and September. Chief Economist Philip Lane backed the timeline on Monday, calling moves of that size a benchmark pace in exiting stimulus, which also includes large-scale bond buying. Some officials have floated the idea of hiking by a half-point for the first time in the ECB's history, mirroring the latest Federal Reserve decision. Dutch Governing Council member Klaus Knot has said inflation numbers for May and June will determine whether such a step is warranted. Slovakia's Peter Kozimir, who holds a centrist position in the ECB ratesetting body, told Reuters on Tuesday that while his baseline scenario for July is a quarter-point hike, he's open to talk about a 50-basis-point move. Italy's Inazio Visco pushed back on Tuesday against the prospect of a more aggressive rate step, saying the ECB must proceed in an orderly manner to avoid potential bond market turbulence. His French colleague, François Villarrois de Galhau, said the latest inflation data warrant a gradual but resolute normalization of monetary policy. A rapid slowdown in inflation in the Euro area is an insight, said Kristoff Weill, an economist at Commerce Bank. Even if there's no interruption in Russian oil and gas supplies and if the year-on-year increase in energy prices falls significantly as the year progresses, the inflation rate will probably still be around 6% by the end of the year. German bonds dropped across the curve with benchmarked end-year yields rising 7 basis points to 1.12%. Italian bonds lagged, with equivalent yields rising 13 basis points to 3.13%, while the Euro fell 0.7% to $1.07. Monet markets added to ECB rate-high quagers, pricing 119 basis points of tightening by December. While price growth should peak this quarter, it will still average more than the ECB's 2% target next year, according to European Union forecasts. A European Commission survey this week showed inflation concerns among consumers retreating, though remaining double the average level since 2000. Russia's attack on its neighbor, and the response it's prompted, remains the biggest risk to the Euro area economy. Manufacturing has slowed amid soaring input prices and renewed supply chain snarls. An EU ban on Russian oil, meanwhile, risks further stoking pressure on prices, which are rising partly as the war disrupts wheat and fertilizer supplies. European governments have implemented an array of measures to ease the burden on households. Even so, prices rose by records this month in France, Italy, and Spain. After German inflation reached 8.7%, Finance Minister Christian Lindner on Monday called the fight against it the top priority, while advocating an end to expansive fiscal policy. ECB's visco insists on orderly rate-high pace to avoid stress. ECB's lane calls two-quarter-point rate-hikes benchmark pace. LaGuard prepares for ECB lift-off with yet more record inflation.