What makes monetary policy tricky at this point is that the German economy—which has been Europe’s locomotive during the current cyclical upturn—may be reaching a turning point. Surveys of business and investor confidence have softened—the respected IFO index of German business sentiment fell from 107.0 to 106.4 in Julyamp#45;amp#45;and the so-called “hard data”—industrial production, retail sales, etc.amp#45;amp#45;- has been mixed.