- We have to adjust policy to ensure we achieve price stability
- We need to unwind the covid-induced inflation boom to get supply and demand better balanced
- Covid is the main reason for high inflation
The Fed's thinking on omicron is clear that it will be inflationary. That's fair but it will be interesting how that develops if/when omicron hits China and snarls supply chains. That's inflationary at the outset and the knee-jerk from the Fed will be to hike more but I wonder of the knock-ons to growth and commodity prices were later cause a re-think.