As price increases accelerate, policymakers at leading central banks are slowly starting to move away from the narrative of “transitory” inflation that has already cost them the policy initiative. But the needed pivot is far from complete and not nearly quick enough, particularly at the US Federal Reserve.
urges US monetary policymakers to respond faster to higher and more persistent price growth.
Even if today’s fears of a global production meltdown prove to be exaggerated, COVID-19 has exposed the myriad vulnerabilities of cross-border value chains. The key issue, beyond the immediate priority of easing input shortages, is whether firms will need state help to protect themselves against future supply disruptions.