IMF steering committee communique draft obtained by Reuters
- Inflation dynamics require close monitoring
- Policymakers must be ready to take decisive action on inflation
- Inflation surge still assessed as driven by temporary factors
- Steps need to be taken to make supply chain more resilient in the future
This captures the general sentiment on inflation. Ultimately, we're headed to a real reckoning. If they let inflation run a bit hot, it could break the long-term disinflationary impulse in developed economies -- something they've been trying to do. On the flip side, low rates and low inflation have created the bond bubble and letting the air out of that could be catastrophic.
