(Bloomberg) -- European Central Bank officials about to meet in Frankfurt this week can take heart: according to a Nowcast of inflation, they’ve already reached their 2% target.

The gauge compiled by Bloomberg Economics, incorporating 32 variables ranging from unemployment to energy costs, has just hit 1.95% — after a drop in January producer prices published on Tuesday fed into the model. 

Such a decline in the headline inflation rate for March, if it were to materialize, would mark a drastic change from February’s faster-than-expected 2.6% outcome. 

The nature of the Nowcast means that it’s still likely to fluctuate as further data inputs arrive in coming weeks, and such measurements are also fraught with uncertainty. One element that can’t be captured directly is services — a part of the consumer-price basket that policymakers are watching closely.

Even so, the result illustrates how their judgment on when to cut interest rates is entering a more finely balanced phase. ECB officials are set to gather on Wednesday on the eve of a decision that will be scrutinized by investors for any clues on a possible move.

The producer-price data on Tuesday showed a 0.9% drop on the month — matching the pace of December — and an 8.6% decline from a year earlier. 

Andrej Sokol of Bloomberg Economics, who developed the Nowcast, said that the drop that the measure reveals is noteworthy.

“A move this big is fairly unusual, especially this early in the month,” he said.

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