Global Inflation – Control and Consequences
There are no more doubts: the current global inflation does not derive from a series of independent shocks, whose effects will disappear without the need for actions by the central banks. And the rupture of supply chains is only a small part of the problem, whose main cause is the monetary stimulus policies formulated in response to the effects of the health crisis.
The central banks all around the world are aware they will have to raise interest rates – a movement already under way in several countries – which will provoke deceleration of world growth, already negatively affected by the effects of the Omicron wave of the pandemic.
In this Report, we initially discuss the reactions of some countries, with special focus on the reactions of the Fed; the problems faced by the ECB due to the risk of an energy crisis in Europe resulting from a conflict between Russia and Ukraine; and the behavior of China in line with the common prosperity model being implemented by Xi Jinping.
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