- Inflation staying "stubbornly high" in the US
- May continue to surprise to the upside in Europe, UK
- The "short run" increase in commodity prices is a warning that inflation could trend higher
- Surprised that Fed, ECB, BOE are slow to recognise rising global inflation
To be fair, it was only central banks who didn't really get on board with this whole thing. We warned back in October on the risks of persistently high inflation here. And that was all before omicron even hit. Now, with risks involving China, there's a bigger chance for such high inflation to stay the course for longer.
Anyway, in their defense, central banks are just doing their job at the end of the day. They may sound absurd or behind the curve, but they have a story that they want to try and sell to markets and they will do so for as long as they can get away with it.
This is pretty much the new era of how central bank communication works. You just gotta read between the lines.
