European shares edged lower on Thursday after a easing rebound in the session on as-yet-expected U.S. inflation data gave way to the question of how long it will take for a price surge to moderate.

The Stoxx 600 stock index opened 0.2% lower. European indexes closed up 0.6% on Wednesday as U.S. consumer prices rose at an annual rate of 7%, as investors calculated that did not accelerate the Federal Reserve’s timetable to unwind its pandemic-era monetary stimulus.

London’s FTSE 100 fell 0.1% after gaining 0.8% on Wednesday.

Traders continue to expect the Federal Reserve’s monetary policy decisions to affect global funding costs and stock market valuations, with its main funds rate rising three to four times this year to around 1% this year after approaching zero since March 2020.

This relatively benign financing cost outlook is based on an assessment that U.S. inflation, driven by rebounding energy prices and supply chain bottlenecks disrupted by the coronavirus, will peak soon.

“People like the comfort blanket that feels like a mathematical certainty that 7% inflation is not sustainable,” said Sunil Krishnan, head of multi-asset funds at Aviva Investors.

But that has prevented investors from “asking tough questions,” he added, about how far U.S. inflation will fall and the likelihood that the Fed will need to raise interest rates beyond what the market currently expects.

“If we expect inflation to hit 3.5% by the end of the year, the Fed still has a lot of wood to chop,” he said.

Deutsche Bank strategist Jim Reid added: “The CPI is expected to be bad, so the capacity to shock is relatively low.”

“Most forecasters see a peak in inflation coming soon, but the pace of the decline is open to question.”

Stocks on Wall Street rise after inflation data, ahead of Wednesday’s close Earnings are weak. In Asia, Hong Kong’s Hang Seng fell 0.1% on Thursday, while Tokyo’s Nikkei 225 fell 1%.

The yield on the 10-year U.S. Treasury note rose about 0.03 percentage point to 1.75 percent as prices for benchmark government debt instruments fell.

Euro zone government bond prices have also weakened due to inflation, which has eroded the real returns investors receive from income payments on fixed-interest securities. Germany’s 10-year bond yield rose about 0.02 percentage point to -0.04%, while the Italian equivalent rose 0.03 percentage point to 1.359%.

The U.S. dollar index, which measures the greenback against six other currencies, was down just under 0.3 percent after hitting its lowest level since November on Thursday morning.

Brent crude, the oil benchmark, fell 0.1% to $84.57 a barrel.