Analyst commentary: "For most of the last two or three decades, central banks have had a relatively easy task because every time we come up to a crisis, they have been free to ease policy considerably because of downward inflationary pressure," said Deutsche Bank strategist Jim Reid. "The problem now is that a lot of the exogenous forces at the moment are inflationary, whether it's supply chains or stimulus. This raises the risk of a policy error, but the problem is we don't know which way that policy error is. Is it to do too much (i.e. to keep stimulus going for too long), or is it to tighten policy with all the inflation around and risk choking off the recovery?" |